**UNITED
      STATES**


**SECURITIES
      AND EXCHANGE COMMISSION**


**WASHINGTON,
      D.C. 20549**





**FORM
      10-KSB/A**


AMENDMENT
      NO. 1





[X]  ANNUAL
      REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF
      1934





For
      the
      fiscal year ended March 31, 2007





[  
      ]  TRANSITION
      REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934





For
      the
      transition period from ______________ to ___________





Commission
      file number 000-51594





**GOLDMOUNTAIN
      EXPLORATION CORPORATION**


(Name
      of
      small business issuer in its charter)





**Nevada**
            **98-0455906**(State
                of organization)
            (I.R.S.
                Employer Identification No.)





**30-70
      East Beaver Creek Rd., Richmond Hill, Ontario, Canada L4B
      3B2**


(Address
      of principal executive offices) (Zip Code)





Issuer's
      telephone number: (905) 882-7044





**KONIGSBERG
      CORPORATION**


(Former
      name of issuer)








**Securities
      Registered Pursuant To Section 12(B) Of The Exchange Act:**





None





**Securities
      Registered Pursuant To Section 12(G) Of The Exchange Act:**





Common
      Stock, $0.001 par value





Check
      whether the issuer (1) filed all reports required to be filed by Section 13
      or
      15(d) of the Securities Exchange Act of 1934 during the past 12 months (or
      for
      such shorter periods that the registrant was required to file such reports),
      and
      (2) has been subject to such filing requirements for the past 90 days. Yes
      [X]
      No [  ]





Check
      if
      there is no disclosure of delinquent filers in response to Item 405 of
      Regulation S-B contained in this form, and no disclosure will be contained,
      to
      the best of the registrant's knowledge, in definitive proxy or information
      statements incorporated by reference in Part III of this Form 10-KSB or any
      amendment to this Form 10-KSB. [  ]





Indicate
      by check mark whether the registrant is a shell company (as defined in Rule
      12b-2 of the Exchange Act). Yes [  ] No [X].





The
      issuer's revenues for its most recent fiscal year were $-0-.





The
      aggregate market value of the issuer's voting and non-voting common equity
      held
      by non-affiliates computed by reference to the average bid and ask price of
      such
      common equity as of June 12, 2007, was approximately $7,552,409.





At
      July
      16, 2007, there were 81,027,167 shares of the Registrant’s common stock
      outstanding, which includes 1,166,666 shares of common stock which were sold
      in
      March 2007 and 203,333 shares of common stock which were sold in June 2007,
      which shares have not been physically issued to date.




The
      Issuer is filing this amended report to include
      the Report of its Independent Registered Public Accounting Firm; to correct
      the
      percentage ownership of its Chief Executive Officer disclosed throughout our
      prior Form 10-KSB filing; and to correct the amount of negative working capital
      the Issuer had as of March 31, 2007.














**TABLE
      OF CONTENTS**





**PART
                I**4Item
                1. Description of BusinessItem
                2. Description of Property
            12Item
                3. Legal Proceedings
            15Item
                4. Submission of Matters to a Vote of Security Holders
            15**PART
                II**Item
                5. Market for Common Equity and Related Stockholder Matters
            16Item
                6. Management's Discussion and Analysis or Plan of Operation
            20Item
                7. Financial Statements
            F-1Item
                8. Changes In and Disagreements with Accountants on Accounting and
                Financial Disclosure
            34Item
                8a. Controls and Procedures
            34Item
                8b. Other Information
            34**PART
                III**Item
                9. Directors, Executive Officers, Promoters and Control Persons;
                Compliance with Section 16(A) Of the Exchange Act.
            35Item
                10. Executive Compensation.
            36Item
                11. Security Ownership of Certain Beneficial Owners and Management
                and
                Related Stockholder Matters.
            39Item
                12. Certain Relationships and Related Transactions
            40Item
                13. Exhibits
            41Item
                14. Principal Accountant Fees and Services
            42Signatures
            43











**PART
      I**





FORWARD-LOOKING
      STATEMENTS:





ALL
      STATEMENTS IN THIS DISCUSSION THAT ARE NOT HISTORICAL ARE FORWARD-LOOKING
      STATEMENTS WITHIN THE MEANING OF SECTION 21E OF THE SECURITIES EXCHANGE ACT
      OF
      1934, AS AMENDED. STATEMENTS PRECEDED BY, FOLLOWED BY OR THAT OTHERWISE INCLUDE
      THE WORDS "BELIEVES", "EXPECTS", "ANTICIPATES", "INTENDS", "PROJECTS",
      "ESTIMATES", "PLANS", "MAY INCREASE", "MAY FLUCTUATE" AND SIMILAR EXPRESSIONS
      OR
      FUTURE OR CONDITIONAL VERBS SUCH AS "SHOULD", "WOULD", "MAY" AND "COULD" ARE
      GENERALLY FORWARD-LOOKING IN NATURE AND NOT HISTORICAL FACTS. THESE
      FORWARD-LOOKING STATEMENTS WERE BASED ON VARIOUS FACTORS AND WERE DERIVED
      UTILIZING NUMEROUS IMPORTANT ASSUMPTIONS AND OTHER IMPORTANT FACTORS THAT COULD
      CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE IN THE FORWARD-LOOKING
      STATEMENTS. FORWARD-LOOKING STATEMENTS INCLUDE THE INFORMATION CONCERNING OUR
      FUTURE FINANCIAL PERFORMANCE, BUSINESS STRATEGY, PROJECTED PLANS AND OBJECTIVES.
      THESE FACTORS INCLUDE, AMONG OTHERS, THE FACTORS SET FORTH BELOW UNDER THE
      HEADING "RISK FACTORS." ALTHOUGH WE BELIEVE THAT THE EXPECTATIONS REFLECTED
      IN
      THE FORWARD-LOOKING STATEMENTS ARE REASONABLE, WE CANNOT GUARANTEE FUTURE
      RESULTS, LEVELS OF ACTIVITY, PERFORMANCE OR ACHIEVEMENTS. MOST OF THESE FACTORS
      ARE DIFFICULT TO PREDICT ACCURATELY AND ARE GENERALLY BEYOND OUR CONTROL. WE
      ARE
      UNDER NO OBLIGATION TO PUBLICLY UPDATE ANY OF THE FORWARD-LOOKING STATEMENTS
      TO
      REFLECT EVENTS OR CIRCUMSTANCES AFTER THE DATE HEREOF OR TO REFLECT THE
      OCCURRENCE OF UNANTICIPATED EVENTS. READERS ARE CAUTIONED NOT TO PLACE UNDUE
      RELIANCE ON THESE FORWARD-LOOKING STATEMENTS. REFERENCES IN THIS FORM 10-KSB/A,
      UNLESS ANOTHER DATE IS STATED, ARE TO MARCH 31, 2007. AS USED HEREIN, THE
      "COMPANY," "GOLDMOUNTAIN," "WE," "US," "OUR" AND WORDS OF SIMILAR MEANING REFER
      TO GOLDMOUNTAIN EXPLORATION CORPORATION.





**ITEM
      1. DESCRIPTION OF BUSINESS**





**BUSINESS
      HISTORY**





We
      were
      incorporated in Nevada on November 3, 2004, as Konigsberg Corporation, however
      we subsequently changed our name to GoldMountain Exploration Corporation, as
      described below.





-4-


Stock
      Purchase Agreement





On
      March
      27, 2006, our then Chief Executive Officer and Sole Director, Susan Downing,
      entered into a Stock Purchase Agreement (the "Purchase Agreement") with Adam
      Cegielski, who up until that time had not been affiliated with us. Pursuant
      to
      the Purchase Agreement, Mr. Cegielski purchased forty million (40,000,000)
      shares of our common stock from Ms. Downing for aggregate consideration of
      $30,000. The Purchase Agreement closed on March 27, 2006 (the
      "Closing").





As
      a
      result of the Closing, Mr. Cegielski obtained majority voting control over
      the
      Company, as the 40,000,000 shares which he purchased constituted 51.5% of the
      Company's then outstanding shares of common stock based on 77,600,000 shares
      of
      common stock outstanding as of March 27, 2006 (the "Change in
      Control").





In
      connection with the Change of Control of the Company, the Company's then Chief
      Executive Officer, President, Principal Accounting Officer, Treasurer and
      Secretary, Susan Downing, resigned on March 27, 2006, and Mr. Cegielski was
      appointed as the Company's Chief Executive Officer, President, Principal
      Accounting Officer, Treasurer and Secretary.





Additionally,
      on March 27, 2006, Ms. Downing resigned as the Company's sole Director and
      Mr.
      Cegielski was appointed as the Company's sole Director by the Company's majority
      shareholders, to fill the vacancy left by Ms. Downing's
      resignation.





Forward
      Stock Split





On
      April
      12, 2006, our Board of Directors approved a 4:1 forward stock split to
      shareholders of record as of April 25, 2006 (the "Forward Stock Split"). The
      Forward Stock Split affected our issued and outstanding, as well as our
      authorized shares of common stock, and as a result, after the Forward Stock
      Split, we had 400,000,000 shares of common stock authorized with a par value
      of
      $0.001 per share.





On
      April
      17, 2006, we filed a Certificate of Change Pursuant to Nevada Revised Statutes
      78.209 ("Certificate") to our Articles of Incorporation with the Secretary
      of
      State of Nevada, which became effective April 25, 2006, to affect a the Forward
      Stock Split. Subsequent to the filing of the Certificate, we filed a Certificate
      of Correction ("Correction") with the Secretary of State of Nevada, to correct
      the Certificate, which Correction clarified that our 100,000,000 shares of
      authorized preferred stock, $0.001 par value, were not affected by the forward
      stock split.





As
      a
      result of the filing of the Certificate and Correction thereto, we now have
      400,000,000 shares of common stock authorized, $0.001 par value, and 100,000,000
      shares of preferred stock authorized, $0.001 par value per share. Unless
      otherwise stated, all shares amounts used in this 10-KSB are reflected in post
      Forward Stock Split amounts.





-5-





Name
      Change





At
      our
      annual meeting of shareholders held on May 10, 2007, our Chief Executive
      Officer, Director and majority shareholder, Adam Cegielski, re-elected himself
      as a Director of the Company, ratified the appointment of Telford Sadovnick,
      P.L.L.C., as our Certified Public Accountant for the 2007 fiscal year, and
      approved the filing of a Certificate of Amendment to our Articles of
      Incorporation with the Secretary of State of Nevada to change our name to
“GoldMountain Exploration Corporation” (the “Amendment”).





Mr.
      Cegielski, held 40,000,000 shares of our common stock, representing 50.2% of
      our
      outstanding common stock as of the record date of the annual meeting, March
      29,
      2007 (the “Record Date”), based on 79,657,168 shares of common stock outstanding
      as of the Record Date. Notice of the annual meeting was sent to all shareholders
      of record as of the Record Date on or about April 9, 2007.





On
      May
      16, 2007, we filed the Amendment with the Secretary of State of Nevada, which
      Amendment became effective immediately with the State of Nevada, but which
      effectiveness was delayed by approximately ten (10) days due to our requirement
      to provide NASD notice of our name change. As a result, our name change to
      GoldMountain Exploration Corporation became effective with the Over-The-Counter
      Bulletin Board on May 29, 2007, when our trading symbol changed to
“GMEX.”








**BUSINESS
      OPERATIONS**





We
      are an
      exploration stage company engaged in the acquisition and exploration of mineral
      properties. We currently plan to focus solely on our joint venture in connection
      with exploration and development activities in the "Yoquivo Property," which
      we
      have entered into an Option Agreement in connection with, as described
      below.





Option
      Agreement





On
      April
      13, 2006, we entered into a letter of intent with a wholly owned subsidiary
      of
      Sydney Resource Corporation ("Sydney") to earn up to a 75% joint venture
      interest in the Yoquivo Au-Ag property located in Sonora, Mexico (the "Yoquivo
      Property" and the "Letter of Intent"). The Yoquivo Property represents
      approximately 7,000 acres of land. Sydney merged with Band-Ore Resources Ltd.
      in
      September 2006, and is now known as West Timmins Mining, Inc. (TSX-WTM) ("West
      Timmins").





On
      May
      31, 2006, we and West Timmins (at that time still known as Sydney) entered
      into
      an Option Agreement regarding our ability to earn up to a 75% interest in the
      joint venture interest in the Yoquivo Property (the "Option Agreement" and
      the
“Option”).




-6-


Pursuant
      to the Option Agreement, West Timmins granted us the right to earn an initial
      (First Option) undivided 50% interest in and to the mineral rights to the
      Yoquivo Property in exchange for the following cash, share and work expenditure
      considerations to be delivered/met over a 24 month period from the signing
      of
      the letter of intent, as more specifically detailed below:





A.
            Our
                making, in favor of West Timmins, the following cash payments totaling
                $200,000 dollars over a 90 day
                period:





i)
            $25,000
                within five days of signing of the Letter of Intent, which we have
                paid as
                of the date of this filing,ii)
            an
                additional $75,000 within 30 days of signing the Letter of Intent,
                which
                we have paid as of the date of this filing, andiii)
            an
                additional $100,000 within 90 days of signing the Option Agreement,
                which
                we have paid to date.





B.
            Our
                issuing 1,000,000 shares of restricted common
                stock:





i)
            500,000
                shares of common stock within 30 days of signing the Letter of Intent,
                which we have issued as of the date of this filing, andii)
            An
                additional 500,000 shares of common stock within 12 months of signing
                of
                the Letter of Intent, which shares have been issued as of the date
                of this
                filing.





C.
            Our
                completing the following cumulative exploration expenditures on the
                Yoquivo Property totaling $1,000,000 over a 24 month period,
                including:





i)
            $250,000
                in cumulative exploration expenditures within the first 6 months
                after
                signing the Letter of Intent, which amount has been paid to
                date;ii)
            $600,000
                in cumulative exploration expenditures within 12 months of signing
                the
                Letter of Intent, which date has been extended until June 30, 2007,
                pursuant to the Second Extension Letter, described below, which payments
                have not been made to date, and which payments we are in default
                of;
                andiii)
            $1,000,000
                in cumulative exploration expenditures within 24 months of signing
                the
                Letter of Intent.





On
      January 29, 2007, due to delays in the drilling program, West Timmons sent
      us a
      letter extending the date we were required to complete the $250,000 funding
      (as
      described above under Section C(i)), to February 28, 2007, due to certain delays
      in connection with the exploration of the Yoquivo Property (the “First Extension
      Letter”). The $250,000 in funding due by the revised February 28, 2007 date was
      subsequently paid
      to
      West Timmons and we did not default under our obligations under Section C(i)
      of
      the Option Agreement.


-7-





On
      May
      31, 2007, due to the slow pace of the drilling program, West Timmons sent us
      another letter extending the date we were required to complete the $600,000
      in
      cumulative funding by (as described above under Section C(ii) above), to June
      30, 2007 (the “Second Extension Letter”).





We
      have
      paid approximately $275,000 towards exploration expenditures on the Yoquivo
      Property as of the date of this filing. We were required to pay at least an
      additional approximately $325,000 towards exploration expenditures by June
      30,
      2007 (for a total of $600,000), which payments were not made as of June 30,
      2007, and have not been made to date, and as such we are in default of such
      required payments to West Timmons and the Option Agreement. We hope to raise
      an
      additional $1,000,000 in financing through the sale of securities subsequent
      to
      the filing of this report, of which there can be no assurance. In the event
      we
      raise the $1,000,000 in additional funding after we file this report, we will
      pay West Timmons the $325,000 in additional exploration expenditures at that
      time.




West
      Timmins will act as operator during the earn-in phase of the agreement and
      will
      be entitled to charge a management fee of 10% on all property exploration
      expenditures and related head office overhead. The Joint Venture is currently
      being managed by a management committee consisting of three individuals, two
      of
      which are affiliated with West Timmins and our Chief Executive Officer and
      Director, Adam Cegielski. As operator, West Timmins will be responsible for
      proposal of exploration programs to the management committee. We as funding
      partner are responsible for funding, in full, any and all exploration programs
      approved by the management committee in advance of the commencement of
      exploration, as well as being responsible for making all necessary property
      and
      tax payments to keep the property in good standing.





West
      Timmins agreed to grant us a second option (the Second Option) pursuant to
      the
      Option Agreement, to earn an additional 25% interest in the joint venture (for
      75% total), subject to back-in provisions in favor of West Timmins as indicated
      below, under the following terms and conditions:





A.
            Within
                60 days of having vested an initial 50% interest in the property,
                making a
                cash payment in favor of West Timmins of $250,000
                dollars,B.
            Within
                60 days of having vested an initial 50% interest in the property,
                issuing
                to West Timmins an additional 1,000,000 common shares,
                andC.
            Completing
                an additional $1,500,000 in exploration expenditures on the property
                within an additional 24 month period and making the necessary cash
                payments to any vendor as per the terms and conditions of the underlying
                agreement.





-8-


However,
      should we successfully exercise the Second Option, West Timmins has the one-time
      right, exercisable within 90 days of us having vested all 75% of the joint
      venture, via the Second Option, to back into a 50% interest (the "Back In
      Right") in the property by making a single cash payment to us equal to the
      greater of:





i)
            2.0
                times our cumulative exploration expenditures incurred under the
                terms of
                the Second Option, exclusive of acquisition payments;
                orii)
            should
                the value of our shares issued under the terms of the Second Option
                exceed
                $1,500,000 on the date of the exercise of the Back In Right, a total
                of
                2.0 times our cumulative exploration expenditures incurred under
                the terms
                of the Second Option, exclusive of acquisition costs, plus one half
                of the
                amount by which our shares exceed
                $1,500,000.




Finally,
      we have the additional right, exercisable within 7 days of receipt of notice
      of
      West Timmins' decision to exercise its Back In Right, to extinguish West
      Timmins' Back In Right, through the issuance of an additional 1,000,000 shares
      of our common stock to West Timmins.





In
      the
      event that we do not exercise our Second Option and/or act to extinguish West
      Timmins' Back In Right, it is anticipated that a joint venture will be formed
      between the parties under an industry standard joint venture agreement, with
      each party owning and paying expenses on a pro-rata basis based on their then
      ownership of the joint venture.





The
      Option Agreement also provides that the joint venture agreement will include
      a
      provision whereby in the event that the joint venture interest of either party
      is diluted to a 10% working interest in accordance with the terms of the joint
      venture agreement, the diluted party shall revert to a 2.0% net smelter royalty
      on the party, which is to be subject to an exclusive and irrevocable option
      held
      by the non-diluted party to purchase such 2.0% net smelter royalty (i.e. 1.0%)
      for a sum of $2.0 million.





**Development
      Activities in The Yoquivo Property**





We
      agreed
      pursuant to the Option Agreement to expend $1,000,000 in cumulative exploration
      activities on the Yoquivo Property over a twenty-four (24) month period, of
      which approximately $275,000 has been expended to date and approximately
      $325,000 was due to West Timmons by June 30, 2007, pursuant to the Second
      Extension Letter, which payments were not made by June 30, 2007, and which
      we
      are in default of.





The
      goals
      of the initial phase of exploration include evaluating the structural setting
      of
      minerals which are found in the property and to find certain drilling targets
      to
      be tested as part of Phase 2 of the exploration program.





Phase
      1
      of the exploration program on the Yoquivo Property, which was started during
      the
      1st week of August 2006, and which has been completed to date, included the
      following:


-9-





o
            Detailed
                structured mapping, to identify large and small scale structural
                controls,
                which will include collecting additional ground samples, which mapping
                has
                been completed to date.o
            An
                Airborne Magnetic Survey conducted of the Yoquivo Property via helicopter,
                which we hope will aid in the understanding and tracing of the large
                scale
                structural features of the property, which has been completed to
                date.o
            Underground
                Sampling, intended to gain a greater understanding of the controls
                on and
                nature of the mineralization within the property, which has been
                completed
                to date.o
            Development
                of a geological model to aid in the Phase II program described below,
                which has been completed to date.





Phase
      II
      of our exploration of the Yoquivo Property will include drill testing of the
      property which is currently ongoing.





The
      drilling process includes drawing up a plan of proposed drill holes and
      submitting the plan to the local ejido (surface rights owners), municipality
      and
      government agencies for their approval. In the case of the Yoquivo Property,
      it
      also requires a biological survey of the areas likely to be effected by the
      drilling to determine any environmental considerations which may need to be
      addressed in connection with the drilling. The permit specifies how many sites,
      duration of proposed program, use of water, method for disposal of wastes,
      hazardous material handling protocols, the name and contacts of the project
      operator as well as all of the legal documentation on title for the property.





As
      of the
      filing of this report, two
      diamond drill holes have been completed on the Yoquivo Property, from which
      three samples were drawn. The results of those diamond drill holes and samples
      are summarized in the table below:





**Hole**
            **From**
            **To**
            **Interval(1)**
            **Gold**
            **Silver****No.**
            **(Meters
                Down Hole)**
            **(Meters
                Down Hole)**
            **Meters**
            **g/t(2)**
            **g/t**Y07-01
            41.10
            41.80
            0.70
            2.18
            289.00Y07-01
            185.75
            188.40
            2.65
            0.41
            32.68Y07-02
            102.00
            114.00
            12.00
            0.15
            40.18


(1)
      Intervals are interpreted to represent 115-120% of true thicknesses.


(2)
      Grams
      per ton.





Geochemical
      results reported herein are from halved drill cores collected from the Company’s
      Yoquivo Property. Core sampling is conducted on site by trained personnel and
      sealed samples are transported to ALS-Chemex’s preparation facilities in
      Chihuahua, Mexico by employees of the consulting firm Minera Cascabel S.A.
      de C.
      V. on behalf of West Timmins. The remaining half of the drill core is stored
      in
      a secure facility on the project site.


-10-





All
      samples were assayed for gold and/or silver by standard fire assay Inductively
      Coupled Plasma -(ICP) finish with a 50 gram charge. Samples additionally
      underwent 34 element Inductively Coupled Plasma-Mass Spectrometry (ICP-MS)
      analysis. Gold values in excess of 3.00 g/t (grams per ton) were re-analyzed
      by
      fire assay with gravimetric finish for greater accuracy. Silver, zinc, copper
      and lead values in excess of 100 parts per million (ppm), were also repeated
      by
      fire assay. For quality control purposes, blank and analytical control standards
      were inserted into the sample sequence at regular intervals, and no
      discrepancies were reported.





As
      of the
      filing of this report, we have spent approximately $275,000 on the exploration
      program on the Yoquivo Property, and were required to expend an additional
      $325,000 prior to June 30, 2007, pursuant to the terms of the Second Extension
      Letter, which amount has not been paid to date, and which payments we are
      therefore in default of. We hope to raise approximately $1,000,000 subsequent
      to
      the filing of this report through the private placement of units consisting
      of
      shares of common stock and warrants to purchase shares of our common stock,
      of
      which there can be no assurance.





Competition





We
      are an
      exploration stage company. We compete with other mineral resource exploration
      and development companies for financing and for the acquisition of new mineral
      properties. Many of the mineral resource exploration and development companies
      with whom we compete have greater financial and technical resources than us.
      Accordingly, these competitors may be able to spend greater amounts on
      acquisitions of mineral properties of merit, on exploration of their mineral
      properties and on development of their mineral properties. In addition, they
      may
      be able to afford greater geological expertise in the targeting and exploration
      of mineral properties. This competition could result in competitors having
      mineral properties of greater quality and interest to prospective investors
      who
      may finance additional exploration and development. This competition could
      adversely impact on our ability to finance further exploration and to achieve
      the financing necessary for us to develop our mineral properties.





Employees





We
      have
      no employees as of the date of this filing other than our sole officer and
      Director, Adam Cegielski.





Research
      And Development Expenditures





We
      have
      not incurred any research expenditures since our incorporation. We previously
      expended $5,000 on our now abandoned exploration program on our prior Nanaimo,
      British Columbia claims, which have since expired and which we have since
      abandoned and approximately $275,000 in exploration expenditures on our Yoquivo
      Property joint venture project, described in greater detail
      above.


-11-





Subsidiaries





Konigsberg
      Explorations Inc., a British Columbia corporation, is our sole wholly owned
      subsidiary, which we anticipate dissolving shortly after the filing of our
      Report on Form 10-KSB for the period ending March 31, 2007. All of our
      operations are currently conducted through Konigsberg Explorations Inc. All
      references in this Annual Report to "us," the "Company," "we,"
      "GoldMountain ,"
      or
      words of similar meeting include the operations of Konigsberg Explorations
      Inc.,
      unless otherwise stated or the context suggests otherwise.





Patents
      And Trademarks





We
      do not
      own, either legally or beneficially, any patent or trademark.





**ITEM
      2. DESCRIPTION OF PROPERTY**





**OFFICE
      SPACE**





We
      rent
      approximately 1,200 square feet of office space at 70 East Beaver Creek Road,
      in
      Richmond Hill, Ontario. The term of our lease on the office space is from
      September 1, 2006 until August 31, 2007. During the term of the lease agreement,
      we agreed to pay approximately US $980 for each month of the lease term. We
      also
      agreed to pay approximately US $235 upon the expiration of the lease agreement
      to the landlord for normal wear and tear on the office space.





**YOQUIVO
      PROPERTY**





We
      have
      entered into an Option Agreement with Sydney to earn up to a 75% interest in
      the
      mineral interests in the Yoquivo Property.





**LOCATION
      AND MEANS OF ACCESS TO THE PROPERTY:**





The
      Yoquivo mining district is located at the headwaters of the Mayo River in the
      northern part of the Sierra Madre Occidental mountain range, approximately
      30
      miles west of San Juanito, Chihuahua, Mexico. Mining districts surrounding
      the
      Yoquivo Property include the mining district of Ocampo approximately 22 miles
      to
      the northwest; the mining district of Candame approximately 19 miles west and
      the mining district of Maguarichic approximately 15 miles to the
      south.





The
      mining concessions that comprise the Yoquivo Property are located at
      approximately 130 miles west south west of the city of Chihuahua, Mexico, in
      the
      Municipality of Ocampo, estate of Chihuahua. It is believed that mineralization
      on the property, which encompasses a total of 28 square kilometers, occurs
      in an
      area of approximately 4.5 square kilometers. The property is accessible via
      roads and a small scale mill exists on the property.


-12-





**DESCRIPTION
      OF THE MINERAL TITLES HELD IN THE YOQUIVO PROPERTY:**





The
      Yoquivo Property is comprised of six (6) mining concessions El Dollar, La Nina,
      La Restauradora, Dolores, San Francisco de Yoquivo and La Copa, which have
      the
      following mining concession titles:








**Name**
            **Title
                No.**
            **Concession
                Type**El
                Dollar
            214876
            ExploitationLa
                Nina
            217475
            ExplorationLa
                Restauradora
            217476
            ExplorationDolores
            216491
            ExplorationSan
                Francisco de Yoquivo
            220851
            ExplorationLa
                Copa
            223499
            Exploration








**PAST
      HISTORY OF THE YOQUIVO PROPERTY (AS FAR AS KNOWN):**





The
      San
      Andres del Rio district, presently known as the Yoquivo District, has been
      mined
      since approximately 1867. The Yoquivo Property was mined by the Yoquivo
      Development Company of New York City ("YD Company") during the period from
      1908
      to 1925. The first 650 tons of ore which passed through the YD Company plant
      during this time period yielded 36 grams of gold and 4,200 grams of silver.
      High-grade ore from the YD Company plant averaged 1,540 grams of gold and
      224,000 grams of silver. With reserves diminishing in 1924, the YD Company
      terminated its mine on the Yoquivo District, on March 15, 1925.





In
      the
      mid 1970's Cia Minera La Rastra, S.A., drove a tunnel approximately 1,000 feet
      parallel to the caved areas on the San Francisco Vein, in order to access 1)
      exposed vein intersections in the interior of the mine, 2) mineral ores; and
      3)
      construct drill pads for testing the San Francisco vein at depth. After making
      five unsuccessful drill holes, the company withdrew from the area.





Mead
      Exploration Co. of El Paso, Texas ("Mead"), leased the property in 1976, and
      began production from narrow high-grade stringers, which paid the costs of
      exploration. Mead terminated activities when development work failed to produce
      large quantities of high-grade ore.





**PRESENT
      CONDITION OF PROPERTY:**





Regional
      geology, reported by the Council of Mineral Resources in 2000, "Letter
      Geologico-Minera Tecoripa H12-12, Scale 1:250,000" for the area of the Yoquivo
      project,
      consists of andesites and andesitic tufas of Eoceno-Oligoceno age that are
      covered in by ryolitic and ryolite tufas with Oligocene, corresponding to the
      Inferior and Superior Volcanic Group of the Sierra Madre Occidental mountain
      range.


-13-





Precious
      metal mineralization is limited to the Lower Volcanic Series in the Yoquivo
      district.





The
      San
      Francisco vein system extends over 1,500 feet northwest in the south-central
      portion of the claim region, and consists of an underground test of a small
      region. The same vein trend is found approximately 1,500 feet further northeast
      where minor development was undertaken.





The
      Pertenencia vein lies 2,000 feet east from the San Francisco vein. It is
      semi-parallel to it, and was historically the second largest producer of mineral
      ore.





The
      main
      San Francisco vein is a fault zone varying from 3 feet to 30 feet in width,
      with
      an average width of 10 feet. Pre- and post-mineralization faulting is evident,
      and the fault is oxidized and contains breccia, rock flour, and calcite veins,
      which form low-grade ore.





Three
      distinct types of mineralization are present in the Yoquivo district. The first
      high-grade type consists of quartz-sulfide mineralization, which often includes
      mixed sulfides of copper, lead, zinc, and silver, with occasional native gold.
      Mineralogy is relatively simple, consisting of chalcopyrite, bornite, galena,
      sphalerite, argentite, stromeyerite and some native silver.





The
      second type of mineralization consists of argentiferous galena, with or without
      minor sphalerite, in quartz. This is the vein filling material in the
      Pertenencia vein system.





The
      third
      type of mineralization constitutes the San Francisco Fault, which contains
      variable amounts of faulted and brecciated primary high-grade ore, calcite
      veins, and secondary enrichment.





We
      believe that the future of the mine and district lies in understanding the
      structural and the geochemical genesis of the high-grade block with
      quartz-sulfide mineralization and its relationships with adjacent geologic
      blocks. This mineralized zone may extend for a vertical distance of
      approximately 1,000 feet. Additionally, given the nature of geologic processes,
      i.e. most mining districts are not constituted by one vein, there exists a
      possibility that additional vein targets exist; however, the idea of host rock
      or "between the vein" disseminations has never been tested in the
      district.





The
      Yoquivo Property is an exploration stage project, not a proven mine. There
      is no
      modern plant or equipment on the property. Planned exploration activities on
      the
      property can be found above under "Development Activities in the Yoquivo
      Property." Additionally, there are no proven or probable reserves at this point
      in time.





-14-


**ITEM
      3. LEGAL PROCEEDINGS**





From
      time
      to time, we may become party to litigation or other legal proceedings that
      we
      consider to be a part of the ordinary course of our business. We are not
      currently involved in legal proceedings that could reasonably be expected to
      have a material adverse effect on our business, prospects, financial condition
      or results of operations. We may become involved in material legal proceedings
      in the future.





**ITEM
      4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS**





At
      our
      annual meeting of shareholders held on May 10, 2007, our Chief Executive
      Officer, Director and majority shareholder, Alex Cegielski, re-elected himself
      as a Director of the Company, ratified the appointment of Telford Sadovnick,
      P.L.L.C., as our independent auditors for the 2007 fiscal year, and approved
      the
      filing of a Certificate of Amendment to our Articles of Incorporation with
      the
      Secretary of State of Nevada to change our name to “GoldMountain Exploration
      Corporation” (the “Amendment”).





Mr.
      Cegielski, held 40,000,000 shares of our common stock, representing 50.2% of
      our
      outstanding common stock as of the record date of the annual meeting, March
      29,
      2007 (the “Record Date”), based on 79,657,168 shares of common stock outstanding
      as of the Record Date. Notice of the annual meeting was sent to all shareholders
      of record as of the Record Date on or about April 9, 2007.





On
      May
      16, 2007, we filed the Amendment with the Secretary of State of Nevada, which
      Amendment became effective immediately with the State of Nevada, but which
      effectiveness was delayed by approximately ten (10) days due to our requirement
      to provide NASD notice of our name change. As a result, our name change to
      GoldMountain Exploration Corporation became effective with the Over-The-Counter
      Bulletin Board on May 29, 2007, when our trading symbol changed to
“GMEX.”





-15-


**PART
      II**





**ITEM
      5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER
      MATTERS**





Our
      common stock, $.001 par value per share, has traded on the over-the-counter
      Bulletin Board (the "OTCBB") under the symbol “GMEX” since May 29, 2007. From
      April 25, 2006 until May 25, 2007, our common stock traded under the symbol
      "KGBC," and prior to April 25, 2006, our common stock traded under the symbol
      "KNBG."





The
      following table sets forth the high and low bid prices for our common stock
      for
      the periods indicated as reported on the OTCBB. The quotations reflect
      inter-dealer prices, without retail mark-up, markdown or commission and may
      not
      represent actual transactions.





**Quarter
                Ended:**
            **High
                Bid:**
            **Low
                Bid:****March
                31, 2007**
            $0.3000
            $0.1400**December
                31, 2006**
            $0.4350
            $0.1100**September
                30, 2006**
            $0.9400
            $0.2200**June
                30, 2006(1)**
            $1.0800
            $0.0625**March
                31, 2006*(1)**
            $0.0625
            $0.0625





*
      We had
      limited trading in our stock during the quarter ended March 31, 2006.





(1)
      We
      filed a Certificate of Change Pursuant to Nevada Revised Statutes 78.209
      ("Certificate") to our Articles of Incorporation with the Secretary of State
      of
      Nevada, which became effective April 25, 2006, to affect a forward stock split.
      The Certificate affected a 4:1 forward stock split, effective for shareholders
      of record as of April 25, 2006, which forward split also affected our authorized
      common stock (the "Forward Split"). As a result of the filing of the
      Certificate, our authorized common stock was increased to 400,000,000 shares
      of
      common stock, par value $.001 per share. The high and low bid prices above
      retroactively reflect the Forward Split.





General





Our
      authorized capital stock consists of 400,000,000 shares of common stock, with
      a
      par value of $0.001 per share, and 100,000,000 shares of preferred stock, with
      a
      par value of $0.001 per share. As of June 12, 2007, there were 81,027,167 shares
      of our common stock outstanding (which includes 1,166,666 shares of common
      stock
      which were sold in March 2007 and 203,333 shares of common stock which were
      sold
      in June 2007, which shares have not been physically issued to date), which
      shares were held of record by approximately
      thirty-five (35) shareholders and no shares of preferred stock issued or
      outstanding.


-16-





Common
      Stock





Our
      common stock is entitled to one vote per share on all matters submitted to
      a
      vote of the stockholders, including the election of directors. Except as
      otherwise required by law or provided in any resolution adopted by our board
      of
      directors with respect to any series of preferred stock, the holders of our
      common stock will possess all voting power. Generally, all matters to be voted
      on by stockholders must be approved by a majority (or, in the case of election
      of directors, by a plurality) of the votes entitled to be cast by all shares
      of
      our common stock that are present in person or represented by proxy, subject
      to
      any voting rights granted to holders of any preferred stock. Holders of our
      common stock representing one-percent (1%) of our capital stock issued,
      outstanding and entitled to vote, represented in person or by proxy, are
      necessary to constitute a quorum at any meeting of our stockholders. A vote
      by
      the holders of a majority of our outstanding shares is required to effectuate
      certain fundamental corporate changes such as liquidation, merger or an
      amendment to our Articles of Incorporation. Our Articles of Incorporation do
      not
      provide for cumulative voting in the election of directors.





Subject
      to any preferential rights of any outstanding series of preferred stock created
      by our board of directors from time to time, the holders of shares of our common
      stock will be entitled to such cash dividends as may be declared from time
      to
      time by our board of directors from funds available. See "Dividend
      Policy".





Subject
      to any preferential rights of any outstanding series of preferred stock created
      from time to time by our board of directors, upon liquidation, dissolution
      or
      winding up of our company, the holders of shares of our common stock will be
      entitled to receive pro rata all assets of our company available for
      distribution to such holders.





In
      the
      event of any merger or consolidation of our company with or into another company
      in connection with which shares of our common stock are converted into or
      exchangeable for shares of stock, other securities or property (including cash),
      all holders of our common stock will be entitled to receive the same kind and
      amount of shares of stock and other securities and property (including
      cash).





Holders
      of our common stock have no pre-emptive rights, no conversion rights and there
      are no redemption provisions applicable to our common stock.





Preferred
      Stock





Our
      board
      of directors is authorized by our articles of incorporation to divide the
      authorized shares of our preferred stock into one or more series, each of which
      shall be so designated as to distinguish the shares of each series of preferred
      stock from the shares of all other series and classes. Our board of directors
      is
      authorized, within any limitations prescribed by law and our Articles of
      Incorporation, to fix and determine the designations,
      rights, qualifications, preferences, limitations and terms of the shares of
      any
      series of preferred stock including but not limited to the
      following:


-17-





(a)
      the
      rate of dividend, the time of payment of dividends, whether dividends are
      cumulative, and the date from which any dividends shall accrue;





(b)
      whether shares may be redeemed, and, if so, the redemption price and the terms
      and conditions of redemption;





(c)
      the
      amount payable upon shares of preferred stock in the event of voluntary or
      involuntary liquidation;





(d)
      sinking fund or other provisions, if any, for the redemption or purchase of
      shares of preferred stock;





(e)
      the
      terms and conditions on which shares of preferred stock may be converted, if
      the
      shares of any series are issued with the privilege of conversion;





(f)
      voting powers which may cause such holders to have super majority voting rights;
      and





(g)
      subject to the above, such other terms, qualifications, privileges, limitations,
      options, restrictions, and special or relative rights and preferences, if any,
      of shares or such series as our board of directors may, at the time so acting,
      lawfully fix and determine under the laws of the State of Nevada.





**DIVIDEND
      POLICY**





To
      date,
      we have not declared or paid any dividends on our outstanding common stock.
      We
      currently do not anticipate paying any cash dividends in the foreseeable future
      on our common stock. Although we intend to retain our earnings to finance our
      operations and future growth, our Board of Directors will have discretion to
      declare and pay dividends in the future. Payment of dividends in the future
      will
      depend upon our earnings, capital requirements and other factors, which our
      Board of Directors may deem relevant.





**RECENT
      SALES OF UNREGISTERED SECURITIES**





On
      March
      15, 2007, we sold 1,000,000 units, each consisting of one share of common stock
      and one two year Class A Warrant to purchase one share of common stock at an
      exercise price of $0.20 per share to entity for aggregate consideration of
      $150,000, or $0.15 per unit. We have not issued the 1,000,000 shares of common
      stock to the entity as of the date of this filing; however, we have agreed
      to
      issue such shares, and have therefore included such shares in the number of
      issued and outstanding shares disclosed throughout this filing. We claim an
      exemption from registration afforded by Regulation S of the Act ("Regulation
      S")
      for the above issuance since the issuance was made to a non-U.S. person (as
      defined under Rule 902 section (k)(2)(i) of Regulation S), pursuant to an offshore
      transaction, and no directed selling efforts were made in the United States
      by
      us, a distributor, any respective affiliates, or any person acting on behalf
      of
      any of the foregoing.


-18-





In
      March
      2007, we sold 166,666 units, each consisting of one share of common stock and
      one two year Class A Warrant to purchase one share of common stock at an
      exercise price of $0.20 per share to entity for aggregate consideration of
      $25,000, or $0.15 per unit. We have not issued the 166,000 shares of common
      stock to the entity as of the date of this filing; however, we have agreed
      to
      issue such shares, and have therefore included such shares in the number of
      issued and outstanding shares disclosed throughout this filing. We claim an
      exemption from registration afforded by Regulation S for the above issuance
      since the issuance was made to a non-U.S. person (as defined under Rule 902
      section (k)(2)(i) of Regulation S), pursuant to an offshore transaction, and
      no
      directed selling efforts were made in the United States by us, a distributor,
      any respective affiliates, or any person acting on behalf of any of the
      foregoing.





In
      June
      2007, we sold 50,000 units, each consisting of one share of common stock and
      one
      two year Class A Warrant to purchase one share of common stock at an exercise
      price of $0.20 per share to an individual for aggregate consideration of $7,500,
      or $0.15 per unit. We have not issued the 50,000 shares of common stock to
      the
      individual as of the date of this filing; however, we have agreed to issue
      such
      shares, and have therefore included such shares in the number of issued and
      outstanding shares disclosed throughout this filing. We claim an exemption
      from
      registration afforded by Regulation S of the Act ("Regulation S") for the above
      issuance since the issuance was made to a non-U.S. person (as defined under
      Rule
      902 section (k)(2)(i) of Regulation S), pursuant to an offshore transaction,
      and
      no directed selling efforts were made in the United States by us, a distributor,
      any respective affiliates, or any person acting on behalf of any of the
      foregoing.





In
      June
      2007, we sold 53,333 units, each consisting of one share of common stock and
      one
      two year Class A Warrant to purchase one share of common stock at an exercise
      price of $0.20 per share to an individual for aggregate consideration of $8,000,
      or $0.15 per unit. We have not issued the 50,000 shares of common stock to
      the
      individual as of the date of this filing; however, we have agreed to issue
      such
      shares, and have therefore included such shares in the number of issued and
      outstanding shares disclosed throughout this filing. We claim an exemption
      from
      registration afforded by Regulation S of the Act ("Regulation S") for the above
      issuance since the issuance was made to a non-U.S. person (as defined under
      Rule
      902 section (k)(2)(i) of Regulation S), pursuant to an offshore transaction,
      and
      no directed selling efforts were made in the United States by us, a distributor,
      any respective affiliates, or any person acting on behalf of any of the
      foregoing.





In
      June
      2007, we sold 100,000 units, each consisting of one share of common stock and
      one two year Class A Warrant to purchase one share of common stock at an
      exercise price of $0.20 per share to an individual for aggregate consideration
      of $15,000, or $0.15 per unit. We have not issued the 50,000 shares of common
      stock to the individual as of the
      date
      of this filing; however, we have agreed to issue such shares, and have therefore
      included such shares in the number of issued and outstanding shares disclosed
      throughout this filing. We claim an exemption from registration afforded by
      Regulation S of the Act ("Regulation S") for the above issuance since the
      issuance was made to a non-U.S. person (as defined under Rule 902 section
      (k)(2)(i) of Regulation S), pursuant to an offshore transaction, and no directed
      selling efforts were made in the United States by us, a distributor, any
      respective affiliates, or any person acting on behalf of any of the
      foregoing.


-19-


**ITEM
      6. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF
      OPERATION**





**PLAN
      OF OPERATIONS**





As
      stated
      above, moving forward, we plan to focus all of our resources on earning an
      interest in the Yoquivo Property through our Option Agreement and joint venture
      with West Timmins (described above).





We
      currently believe that we will be able to continue our business operations
      for
      at least the next ninety days with the current cash on hand that we had as
      of
      the filing of this report, if no additional funding is raised. We plan to raise
      additional funding subsequent to the filing of this report from the sale of
      common stock to offshore investors and/or through loans from our existing
      shareholders, of which there can be no assurance. We anticipate the need for
      approximately $1,000,000 to maintain our operations for the next twelve months
      and complete the anticipated exploration activities on the Yoquivo
      Property.





**RESULTS
      OF OPERATIONS FOR THE FISCAL YEAR ENDED MARCH 31, 2007 COMPARED TO THE FISCAL
      YEAR ENDED MARCH 31, 2006**





We
      did
      not generate any revenues for the fiscal year ended March 31, 2007 or 2006,
      and
      have not generated any revenues to date.





We
      had
      total expenses of $684,878 for the fiscal year ended March 31, 2007, compared
      to
      total expenses of $72,280 for the fiscal year ended March 31, 2006, an increase
      in total expenses of $612,598 from the prior period.





The
      main
      reasons for the increase in expenses was a $361,106 increase in mineral
      exploration costs to $375,895 for the year ended March 31, 2007, compared to
      $14,789 for the year ended March 31, 2006; and a $28,627 increase in mineral
      acquisition costs, to $28,627 for the year ended March 31, 2007, compared to
      $0
      for the year ended March 31, 2006, in connection with fees paid to West Timmons
      in connection with the acquisition of our interests in connection with the
      Option (defined above) Additionally contributing to the increase in expenses
      for
      the year ended March 31, 2007, compared to the year ended March 31, 2006, was
      a
      $49,924 increase in office and sundry expenses to $58,917 for the year ended
      March 31, 2007, compared to $8,993 for the year ended March 31, 2006 in
      connection with the rental of our office space and the purchase of an office
      computer, an increase of $82,374 or 167% in professional fees to $131,699 for
      the year ended March 31, 2007, from $49,325 for the year ended March 31, 2006,
      associated with fees paid to our legal counsel in connection with the
      preparation of our various SEC filings, including our quarterly reports and
      reports on Form 8-K, and our accountant in connection with the audit and review
      of our financial statements, and a decrease in gain on foreign exchange, to
      a
      loss on foreign exchange of $578 for the year ended March 31, 2007, compared
      to
      a gain on foreign exchange of $827 for the year ended March 31, 2006, a $1,405
      or 169.9% decrease on gain on foreign exchange from the prior period.


-20-


We
      also
      had a consulting expense of $43,662, which was mainly in connection with fees
      paid to our Chief Executive Officer, Adam Cegielski; and a stock accretion
      expense of $45,500 in connection with warrants issued in connection with the
      sale of units consisting of common stock and warrants during the year ended
      March 31, 2007, for the year ended March 31, 2007, which expenses were not
      present during the year ended March 31, 2006.





**LIQUIDITY
      AND CAPITAL RESOURCES**





We
      had
      $1,080,126 in total assets, which consisted of total current assets of $20,126
      and non-current assets, consisting solely of mineral properties in connection
      with our Option with West Timmons, of $1,060,000 as of March 31, 2007. Total
      current assets as of March 31, 2007 included $17,096 of cash and $3,030 of
      prepaid expenses.





We
      had
      total liabilities consisting solely of current liabilities of $29,798 as of
      March 31, 2007, which consisted of accounts payable and accrued
      liabilities.





We
      had
      negative working capital of $9,672 and a deficit accumulated during the
      exploration stage of $768,472 as of March 31, 2007.





We
      also
      had $25,000 of stock subscription received as of March 31, 2007, in connection
      with a subscription for 166,666 units, each consisting of one share of common
      stock and one two year Class A Warrant to purchase one share of common stock
      at
      an exercise price of $0.20 per share, which was made by an entity in March
      2007,
      for aggregate consideration of $25,000, or $0.15 per unit, which shares had
      not
      been issued as of March 31, 2007, and have not been issued to date.





We
      had
      $214,475 of cash used in operating activities for the year ended March 31,
      2007,
      which was mainly due to $684,878 of net loss offset by $28,627 of mineral
      acquisition costs, $375,895 of mineral exploration costs and $45,500 of stock
      accretion expense in connection with the sale of certain warrants in connection
      with the sale of units consisting of shares of common stock and warrants during
      the year ended March 31, 2007, which are described in greater detail
      above.





We
      had
      $809,300 of net cash provided by financing activities for the year ended March
      31, 2007, which included share capital issued for cash of $784,300 and share
      subscriptions received of $25,000 in connection with an aggregate of 183,334
      shares of common stock sold to various offshore investors in April 2006 for
      aggregate consideration of $110,000 (or $0.06 per share); 448,000 shares of
      common stock sold to offshore investors in June 2006, for aggregate
      consideration of $268,800 (or $0.60 per share); an aggregate of 425,834 shares
      of common stock sold to two offshore investors in August and September 2006,
      for
      aggregate consideration of $255,500 (or $0.60 per share); and share
      subscriptions received of $175,000 in connection with 1,166,666 shares of common
      stock sold to two offshore investors in March 2007, for aggregate consideration
      of $175,000 (or $0.15 per share), which shares have not been issued to
      date.


-21-


We
      had
      net cash used in investing activities of $604,522 for the year ended March
      31,
      2007, which included $375,895 of mineral exploration costs, $200,000 of
      acquisition of mineral property and $28,627 of mineral acquisition
      costs.





We
      currently believe that we will be able to continue our business operations
      for
      at least the next ninety days with the cash on hand that we had as of the filing
      of this report, if no additional funding is raised.





We
      have
      paid approximately $275,000 towards exploration expenditures on the Yoquivo
      Property as of the date of this filing. We were required to pay at least an
      additional approximately $325,000 towards exploration expenditures by June
      30,
      2007 (for a total of $600,000), which payments were not made as of June 30,
      2007, and have not been made to date, and as such we are in default of such
      required payments to West Timmons and the Option Agreement. We hope to raise
      an
      additional $1,000,000 in financing through the sale of securities subsequent
      to
      the filing of this report, of which there can be no assurance. In the event
      we
      raise the $1,000,000 in additional funding after we file this report, we will
      pay West Timmons the $325,000 in additional exploration expenditures at that
      time.




We
      have
      no current commitments from our officers and Directors or any of our
      shareholders to supplement our operations or provide us with financing in the
      future. If we are unable to raise additional capital from conventional sources
      and/or additional sales of stock in the future, we may be forced to curtail
      or
      cease our operations. Even if we are able to continue our operations, the
      failure to obtain financing could have a substantial adverse effect on our
      business and financial results.





In
      the
      future, we may be required to seek additional capital by selling debt or equity
      securities, selling assets, or otherwise be required to bring cash flows in
      balance when we approach a condition of cash insufficiency. The sale of
      additional equity or debt securities, if accomplished, may result in dilution
      to
      our then shareholders. We provide no assurance that financing will be available
      in amounts or on terms acceptable to us, or at all.





**RISK
      FACTORS**





You
      should carefully consider the following risk factors and other information
      in
      this annual report on Form 10-KSB before deciding to become a holder of our
      Common Stock. If any of the following risks actually occur, our business and
      financial results could be negatively affected to a significant
      extent.





Our
      business and the value of our common stock are subject to the following Risk
      Factors:





**We
      May Not Be Able To Continue Our Business Plan And Exploration Activities Without
      Additional Financing.**




We
        depend
        to a great degree on the ability to attract external financing in order to
        conduct future exploratory activities. We are currently funded solely by
        our
        shareholders and through sales of our securities and we believe that we can
        continue our business operations for at least the next ninety days with the
        cash
        we had on hand as of the filing of this report, however we plan to raise
        additional funds subsequent to the filing of this report through private
        placements of our common stock and/or through shareholder loans, of which
        there
        can be no assurance. If we are unable to raise the additional funds required
        for
        planned exploration and extraction activities, which we do not currently
        have
        funds to pay, we may be forced to abandon our current business plan and/or
        we
        will not be able to earn our First Option with West Timmins (as described
        above). If you invest in us and we are unable to raise the required funds,
        your
        investment could become worthless.


-22-





**Our
      Auditors Have Expressed Substantial Doubt As To Whether Our Company Can Continue
      As A Going Concern.**





We
      are in
      our exploration stage, as planned principal activities have not begun. We have
      not generated any revenues since inception and have incurred substantial losses.
      These factors among others indicate that we may be unable to continue as a
      going
      concern, particularly in the event that we cannot generate sufficient cash
      flow
      to conduct our operations and/or obtain additional sources of capital and
      financing.





**We
      Are Currently In Default of the Payments Which Are Required Pursuant to the
      Option Agreement.**





We
      have
      paid approximately $275,000 towards exploration expenditures on the Yoquivo
      Property, pursuant to the Option Agreement as of the date of this filing. We
      were required to pay at least an additional approximately $325,000 towards
      exploration expenditures by June 30, 2007 (for a total of $600,000), which
      payments were not made as of June 30, 2007, and have not been made to date,
      and
      as such we are in default of such required payments to West Timmons and the
      Option Agreement. Because of our failure to make the required payments as
      provided by the Option Agreement when due, West Timmons may terminate the Option
      Agreement, by providing us thirty (30) days written notice of our default (which
      has not been received to date) and thereafter provide us notice of such
      termination, if we are unable to cure our default within thirty (30) days of
      the
      date such notice is given. If West Timmons provides us written notice of our
      default in required payments, and we are unable to cure such default within
      thirty (30) days from the date such notice is given, West Timmons can terminate
      the Option Agreement, and all of our payments and stock issuances to West
      Timmons, will be retained by them, and we will lose any and all rights to the
      Option Agreement or the Yoquivo Property. If this were to happen, the value
      our
      common stock would likely become worthless, and we could be forced to abandon
      our business plan and/or all our business operations.





**We
      Lack An Operating History Which You Can Use To Evaluate Us, Making Any
      Investment In Our Company Risky.**




We
        lack
        an operating history which investors can use to evaluate our previous earnings,
        as we were only incorporated in November 2004, and have not generated any
        revenues to date. Therefore, an investment in us is risky because we have
        no
        business history and it is hard to predict what the outcome of our business
        operations will be in the future.


-23-





**We
      May Not Find Any Commercial Quantities Of Minerals In The Future, And May Not
      Generate Any Profits, Which May Force Us To Curtail Our Business
      Plan.**





As
      an
      exploration stage company, we have no revenues or profits to date and our
      deficit accumulated during our exploration stage as of March 31, 2007, was
      $768,472. We had negative working capital of $9,672 as of March 31, 2007. We
      are
      currently being funded by existing shareholders and anticipate being able to
      continue our business operations for approximately the next ninety days with
      the
      cash on hand we had as of the filing of this report, and plan to raise
      additional funding subsequent to the filing of this report. However, if we
      do
      not begin exploration and/or do not have enough money to continue exploration
      activities it is likely that we will never generate any revenues. Additionally,
      if we are unsuccessful in mining attempts we may choose to attempt in the
      future, it is likely that we will never generate any revenues. Additionally,
      the
      exploration of minerals is highly speculative, and if throughout our mineral
      exploration we do not find commercial quantities of minerals, we will likely
      be
      forced to curtail or abandon our business plan. If this happens, you could
      lose
      your investment in us. If we are unable to generate profits, we will be forced
      to rely on external financing, of which there is no guarantee, to continue
      with
      our business plan.




**We
      Have A Poor Financial Position And If We Do Not Generate Revenues, We May Be
      Forced To Abandon Our Business Plan.**





We
      currently have a poor financial position. We have not generated any revenues
      or
      begun exploration on any properties. There is a risk that we will not find
      enough, or even any, minerals needed to generate enough profits for your
      investment in us to appreciate. If we never generate any revenues, we may be
      forced to abandon our business plan and your shares may become
      worthless.





**We
      Rely Upon Key Personnel And If They Leave Us, Our Business Plan And Results
      Of
      Operations Could Be Adversely Affected.**





We
      rely
      heavily on our Chief Executive Officer, Chief Financial Officer, Secretary,
      Treasurer and Director, Adam R. Cegielski, for our success. His experience
      and
      input create the foundation for our business and he is responsible for the
      directorship and control over our exploration activities. We do not currently
      have an employment agreement or "key man" insurance policy on Mr. Cegielski,
      although we anticipate entering into a consulting agreement with Mr. Cegielski
      subsequent to the filing of this report. Moving forward, should we lose the
      services of Mr. Cegielski, for any reason, we will incur costs associated with
      recruiting a replacement and delays in our operations. If we are unable to
      replace him with another suitably trained individual or individuals, we may
      be
      forced to scale back or curtail our business plan and exploration activities.
      As
      a result of this, your investment in us could become
      devalued.


-24-





**Adam
      R. Cegielski, Our Sole Director And Officer Can Vote An Aggregate Of 49.4%
      Of
      Our Common Stock And Can Therefore Exercise Significant Control Over Corporate
      Decisions Including The Appointment Of New Directors.**





Adam
      R.
      Cegielski, our sole Director and officer can vote an aggregate of 40,000,000
      shares or approximately 49.4% of our outstanding Common Stock. Accordingly,
      Mr.
      Cegielski will exercise significant control in determining the outcome of all
      corporate transactions or other matters, including the election of directors,
      mergers, consolidations, the sale of all or substantially all of our assets,
      and
      also the power to prevent or cause a change in control. Any investors who
      purchase shares will be minority shareholders and as such will have little
      to no
      say in the direction of the Company and the election of Directors. Additionally,
      it will be difficult if not impossible for investors to remove Mr. Cegielski
      as
      a Director of the Company, which will mean he will remain in control of who
      serves as officers of the Company as well as whether any changes are made in
      the
      Board of Directors. As a potential investor in the Company, you should keep
      in
      mind that even if you own shares of the Company's Common Stock and wish to
      vote
      them at annual or special shareholder meetings, your shares will likely have
      little effect on the outcome of corporate decisions.




**We
      Will Be Subject To Numerous Risks If We Commence Mining Operations, Of Which
      There Can Be No Assurance.**





The
      mineral exploration and mining business is competitive in all of its phases.
      We
      currently have no mining operations of any kind, however we are currently in
      the
      process of conducting diamond drilling through our Joint Venture with West
      Timmins. If we do commence mining activities in the future, we will be subject
      to numerous risks, including:





o
            competitors
                with greater financial, technical and other resources, in the search
                for
                and the acquisition of attractive mineral properties;o
            our
                ability to select and acquire suitable producing properties or prospects
                for mineral exploration;o
            the
                accuracy of our reserve estimates, if any, which may be affected
                by the
                following factors beyond our
                control:





-
            declines
                in the market price of the various metals we mine;-
            increased
                production or capital costs;-
            reduction
                in the grade or tonnage of the deposit;


-25-





-
            increase
                in the dilution of the ore; or-
            reduced
                recovery rates;





o
            risks
                and hazards associated with environmental hazards, political and
                country
                risks, civil unrest or terrorism, industrial accidents, labor disputes,
                unusual or unexpected geologic formations, cave-ins, explosive rock
                failures; and flooding and periodic interruptions due to inclement
                or
                hazardous weather conditions; ando
            our
                failure to maintain insurance on certain risks associated with any
                exploration activities we may undertake in the
                future.





If
      we do
      begin exploration activities in the future, of which there can be no assurance,
      we will be subject to the above risks. If any of the above risks occur, we
      may
      be forced to curtail or abandon our operations and/or exploration and
      development activities, if any. As a result, any investment in us could decrease
      in value and/or become worthless.





**There
      Is Uncertainty As To An Investors Ability To Enforce Civil Liabilities Both
      In
      And Outside Of The United States Due To The Fact That Our Sole Officer And
      Director And Assets Are Not Located In The United
      States.**





Our
      office and the majority of our assets are located in Canada, while the Yoquivo
      Property, which we have entered into an Option Agreement to explore and develop,
      is located in Mexico. Our sole officer and Director is located in Canada. As
      a
      result, it may be difficult for shareholders to effect service of process within
      the United States on our officer and Director. In addition, investors may have
      difficulty enforcing judgments based upon the civil liability provisions of
      the
      securities laws of the Unites States or any state thereof, both in and outside
      of the United States.





**We
      May Not Be Able To Earn Our First Or Second Option With West Timmins Pursuant
      To
      The Option Agreement.**





In
      June
      2006, we entered into an Option Agreement with West Timmins to earn up to a
      75%
      interest in the Yoquivo Property (as defined and described below). In order
      to
      earn the interest of the Yoquivo Property, we were required to pay $600,000
      during the twelve months following our entry into the Option Agreement (i.e.
      prior to June 2007), which date has been extended to June 30, 2007, pursuant
      to
      the Second Extension Letter (described above). To date approximately $575,000
      has been expended on exploration activities by us, and approximately $325,000
      was due to West Timmons by June 30, 2007, which payment was not made and which
      payment we are in default of (see “We Are Currently In Default of the Payments
      Which Are Required Pursuant to the Option Agreement,” above). Additionally,
      prior to the twenty-fourth month anniversary of our entry into the Option
      Agreement (i.e. prior to June 2008), we are required to expend at least
      $1,000,000 in cumulative expenditures. We can provide no assurance that we
      will
      be able to raise the additional capital needed to pay these amounts and/or
      earn
      our interest in
      the
      property on favorable terms, if at all. If we are unable to raise the capital
      required to earn the interest in the Yoquivo Property, our current expenditures
      towards such Option Agreement will be forfeited and we could be forced to
      abandon or curtail our current business plan. If this were to happen, the value
      of our common stock could become worthless.


-26-





**Our
      Determinations Of Planned Activities And Estimates Of Potential Reserves May
      Be
      Inaccurate.**





We
      are
      currently in the exploration stage. Before we can begin a development project,
      if ever, we must first determine whether it is economically feasible to do
      so.
      This determination is based on estimates of several factors,
      including:





o
            expected
                recovery rates of metals from the ore;o
            facility
                and equipment costs;o
            capital
                and operating costs of a development project;o
            future
                metals prices;o
            currency
                exchange and repatriation risks;o
            tax
                rates;o
            inflation
                rates;o
            political
                risks and regulatory climate in Canada; ando
            availability
                of credit.




Any
      development projects we may undertake in the future will likely not have an
      operating history upon which to base these estimates and as a result, actual
      cash operating costs and returns from a development project, if any, may differ
      substantially from our estimates. Consequently, it may not be economically
      feasible to continue with a development project, if one is started.





**We
      Previously Granted An Aggregate Of 300,000 Warrants To Purchase Shares Of Our
      Common Stock In November And December 2006, Which Warrants Have Been Cancelled
      By Us, But Which Shareholders May Still Request Us To Honor In The
      Future.**





In
      November and December 2006, we granted 300,000 Warrants to two individuals
      in
      consideration for consulting services rendered, at an exercise price of $0.35
      per share.  We subsequently took action to amend those Warrants and have
      since unilaterally cancelled
      such Warrants; however, those prior Warrant holders may require us to honor
      the
      terms of the prior Warrant grants in the future. If that were to happen, we
      may
      be required to issue additional shares of common stock and/or expend additional
      resources in connection with litigation and/or disputes regarding such Warrants
      and shares issuable in connection therewith and/or the restatement of the
      financial statements contained herein in connection with such prior Warrant
      grants.  As a result, if such Warrant holders attempt to enforce the
      Warrants which have been rescinded by us, our results of operations could be
      adversely affected, and we could be forced to curtail our business plans, and
      as
      a result, any investment in us could become worthless.


-27-





**Our
      Planned Mineral Exploration Efforts Are Highly
      Speculative.**





Mineral
      exploration is highly speculative. It involves many risks and is often
      nonproductive. Even if we believe we have found a valuable mineral deposit,
      it
      may be several years before production is possible. During that time, it may
      become no longer feasible to produce those minerals for economic, regulatory,
      political, or other reasons. Additionally, we may be required to make
      substantial capital expenditures and to construct mining and processing
      facilities. As a result of these costs and uncertainties, we may be unable
      to
      start, or if started, to finish our exploration activities.





**Our
      Operations, If Any, Will Be Subject To Currency
      Fluctuations.**





While
      we
      do not currently have any operations, we believe that our products, if any,
      will
      be sold in world markets in United States dollars. As a result, currency
      fluctuations may affect the cash flow we realize from our future operations
      and
      exploration activities, which we plan to conduct in Mexico, if any. Foreign
      exchange fluctuations may materially adversely affect our financial performance
      and results of operations.





**Our
      Property Has Not Produced Any Commercial Reserves Or Ore Body, And The
      Probability Of Such Property Producing Any Commercially Viable Reserves In
      The
      Future Is Remote.**





Our
      mineral project is in the exploration stage as opposed to the development stage
      and we have no known body of economic mineralization. The known mineralization
      at these projects has not been determined to be economic ore. Until further
      exploration activities can be conducted, there can be no assurance that a
      commercially mineable ore body exists on any of our properties. In order to
      carry out exploration and development programs of any economic ore body and
      place it into commercial production, we will be required to raise substantial
      additional funding, and even if we are successful in completing our exploration
      activities on our property, we may not be successful in finding commercial
      quantities of minerals. Furthermore, the probability of an individual prospect
      ever having reserves or being commercially viable is extremely remote. As a
      result, there is only a small probability that any of our properties contain
      any
      reserves and that any funds spent on exploration activities will ever be
      recovered.


-28-


**Mining
      Operations In General Involve A High Degree Of Risk, Which We May Be Unable,
      Or
      May Not Choose To Insure Against, Making Exploration And/Or Development
      Activities We May Pursue Subject To Potential Legal Liability For Certain
      Claims.**





Our
      operations are subject to all of the hazards and risks normally encountered
      in
      the exploration, development and production of minerals. These include unusual
      and unexpected geological formations, rock falls, flooding and other conditions
      involved in the drilling and removal of material, any of which could result
      in
      damage to, or destruction of, mines and other producing facilities, damage
      to
      life or property, environmental damage and possible legal liability. Although
      we
      plan to take adequate precautions to minimize these risks, and risks associated
      with equipment failure or failure of retaining dams which may result in
      environmental pollution, there can be no assurance that even with our
      precautions, damage or loss will not occur and that we will not be subject
      to
      liability which will have a material adverse effect on our business, results
      of
      operation and financial condition. If this were to happen, we could be forced
      to
      curtail or abandon our business activities.





**Nevada
      Law And Our Articles Of Incorporation Authorize Us To Issue Shares Of Stock,
      Which Shares May Cause Substantial Dilution To Our Existing Shareholders And/Or
      Have Rights And Preferences Greater Than Our Common
      Stock.**





Pursuant
      to our Articles of Incorporation, we have 400,000,000 shares of Common Stock
      and
      100,000,000 shares of preferred stock ("Preferred Stock") authorized. As of
      June
      12, 2007, we had 81,027,167 shares of our common stock outstanding, which
      includes 1,166,666 shares of common stock which were sold in March 2007 and
      203,333 shares of common stock which were sold in June 2007, which shares have
      not been physically issued to date. As of June 12, 2007, - 0 - shares of
      Preferred Stock were issued and outstanding. As a result, our Board of Directors
      has the ability to issue a large number of additional shares of Common Stock
      without shareholder approval, which if issued could cause substantial dilution
      to our then shareholders. Additionally, shares of Preferred Stock may be issued
      by our Board of Directors without shareholder approval with voting powers,
      and
      such preferences and relative, participating, optional or other special rights
      and powers as determined by our Board of Directors, which may be greater than
      our Common Stock. As a result, shares of Preferred Stock may be issued by our
      Board of Directors which cause the holders to have super majority voting power
      over our shares, provide the holders of the Preferred Stock the right to convert
      the shares of Preferred Stock they hold into shares of our Common Stock, which
      may cause substantial dilution to our then Common Stock shareholders and/or
      have
      other rights and preferences greater than those of our Common Stock
      shareholders. Investors should keep in mind that the Board of Directors has
      the
      authority to issue additional shares of Common Stock and Preferred Stock, which
      could cause substantial dilution to our existing shareholders. Additionally,
      the
      dilutive effect of any Preferred Stock, which we may issue may be exacerbated
      given the fact that such Preferred Stock may have super majority voting rights
      and/or other rights or preferences which could provide the preferred
      shareholders with voting control over us subsequent to this offering and/or
      provide those holders the power
      to
      prevent or cause a change in control. As a result, the issuance of shares of
      Common Stock and/or Preferred Stock, may cause the value of our securities
      to
      decrease and/or become worthless.


-29-





**We
      Have Yet To Attain Profitable Operations And Because We Will Need Additional
      Financing To Fund Our Exploration Activities, Our Accountants Believe There
      Is
      Substantial Doubt About Our Ability To Continue As A Going
      Concern.**





We
      have
      incurred a net loss of $684,878 for the year ended March 31, 2007, had an
      accumulated deficit of $768,472 as of March 31, 2007, and have generated no
      revenues to date. Our future is dependent upon our ability to obtain financing
      and upon future profitable operations from the development of our mineral
      claims. These factors raise substantial doubt that we will be able to continue
      as a going concern. Telford Sadovnick, P.L.L.C., our independent auditors,
      have
      expressed substantial doubt about our  ability to continue as a going
      concern given our recurring losses from operations, which are described in
      the
      first risk factor above. This opinion could materially limit our ability to
      raise additional funds by issuing new debt or equity securities or otherwise.
      If
      we fail to raise sufficient capital, we will not be able to implement our
      exploration program which requires significant funding past the second phase,
      as
      a result we may have to liquidate our business and stockholders may lose their
      investment. Investors should consider our auditor's comments when determining
      if
      an investment in us is suitable.




**Because
      Of The Unique Difficulties And Uncertainties Inherent In Mineral Exploration
      Ventures, We Face A High Risk Of Business Failure.**





Stockholders
      should be aware of the difficulties normally encountered by new mineral
      exploration companies and the high rate of failure of such enterprises. The
      likelihood of success must be considered in light of the problems, expenses,
      difficulties, complications and delays encountered in connection with the
      exploration of the mineral properties that we plan to undertake. These potential
      problems include, but are not limited to, unanticipated problems relating to
      exploration, and additional costs and expenses that may exceed current
      estimates. Most exploration projects do not result in the discovery of
      commercially mineable deposits of ore. Problems such as unusual or unexpected
      formations and other conditions are involved in mineral exploration and often
      result in unsuccessful exploration efforts. If we experience any of these
      problems or delays, our exploration activities could become much more costly
      than originally estimated and if such additional funding is not available if
      needed, we may be forced to abandon our operations.





**We
      Have No Known Mineral Reserves And If We Cannot Find Any, We Will Have To Cease
      Operations.**





We
      have
      no mineral reserves. If we do not find mineral reserves containing gold, silver,
      or other precious minerals or if we cannot explore mineral reserves, either
      because we do not have the money to do it or because it will not be economically
      feasible to do it, we will have to cease operations and stockholders will lose
      their investment. Mineral exploration,
      particularly for gold, is highly speculative. It involves many risks and is
      often non-productive. Even if we are able to find mineral reserves on our
      property our production capability is subject to further risks
      including:


-30-





o
            Costs
                of bringing the property into production including exploration work,
                preparation of production feasibility studies, and construction of
                production facilities, all of which we have not budgeted
                for;o
            Availability
                and costs of financing;o
            Ongoing
                costs of production; ando
            Environmental
                compliance regulations and
                restraints.




The
      marketability of any minerals acquired or discovered may be affected by numerous
      factors which are beyond our control and which cannot be accurately predicted,
      such as market fluctuations, the lack of milling facilities and processing
      equipment near our claims, and such other factors as government regulations,
      including regulations relating to allowable production, importing and exporting
      of minerals, and environmental protection.





Given
      the
      above noted risks, the chances of finding reserves on our mineral properties
      are
      remote and funds expended on exploration will likely be lost.





**Because
      Of The Inherent Dangers Involved In Mineral Exploration, There Is A Risk That
      We
      May Incur Liability Or Damages As We Conduct Our
      Business.**





The
      search for valuable minerals involves numerous hazards. As a result, we may
      become subject to liability for such hazards, including pollution, cave-ins
      and
      other hazards against which we cannot insure or against which we may elect
      not
      to insure. At the present time, we have no coverage to insure against these
      hazards. The payment of such liabilities may result in our inability to complete
      our planned exploration program and/or obtain additional financing to fund
      our
      exploration program.





**We
      May Conduct Further Offerings In The Future In Which Case Stockholders Holdings
      Will Be Diluted.**





We
      completed offerings of 35,200,000 and 2,400,000 shares of our common stock
      at a
      price of $0.0025 per share to investors on February 28, 2005 and April 14,
      2005,
      respectively. Additionally, we sold 183,334 shares of our or common stock to
      two
      offshore investors in April 2006, 448,000 shares of our common stock to three
      offshore investors in June 2006, at a price of $0.60 per share, and an aggregate
      of 425,834 shares of our common stock to two offshore investors in August and
      September 2006, at a price of $0.60 per share. More recently, we sold 1,166,666
      units consisting of one share of common stock and one warrant to purchase one
      share of our common stock for $0.20 per share for aggregate consideration of
      $175,000 or $0.15 per unit in March 2007, and 203,333
      units for aggregate consideration of $30,500 or $0.15 per unit in June 2007.
      Since our inception we have relied on such equity sales of our common stock
      to
      fund our operations. We may conduct further equity and/or debt offerings in
      the
      future to finance our current projects or to finance subsequent projects that
      we
      decide to undertake. If common stock is issued in return for additional funds,
      the price per share could be lower than that paid by our current stockholders.
      We anticipate continuing to rely on equity sales of our common stock or debt
      offerings in order to fund our business operations. If we issue additional
      stock, each stockholder's percentage interest in us will be lower. This
      condition is often referred to as "dilution". The result of this could reduce
      the value of your stock.


-31-


**If
      We Are Late In Filing Our Quarterly Or Annual Reports With The SEC, We May
      Be
      De-Listed From The Over-The-Counter Bulletin Board.**





Pursuant
      to new Over-The-Counter Bulletin Board ("OTCBB") rules relating to the timely
      filing of periodic reports with the SEC, any OTCBB issuer which fails to file
      a
      periodic report (Form 10-QSB's or 10-KSB's) by the due date of such report
      (not
      withstanding any extension granted to the issuer by the filing of a Form
      12b-25), three (3) times during any twenty-four (24) month period is
      automatically de-listed  from the OTCBB. Such removed issuer would not be
      re-eligible to be listed on the OTCBB for a period of one-year, during which
      time any subsequent late filing would reset the one-year period of de-listing.
      If we are late in our filings three times in any twenty-four (24) month period
      and are de-listed from the OTCBB, our securities may become worthless and we
      may
      be forced to curtail or abandon our business plan.





**There
      is currently a limited, sporadic, and illiquid market for our common stock,
      which Market we anticipate remaining limited, sporadic, and
      illiquid.**





We
      currently anticipate that the market for our common stock will remain limited,
      sporadic, and illiquid until such time as we generate significant revenues,
      if
      ever, and that the market for our common stock will be subject to wide
      fluctuations in response to several factors, including, but not limited
      to:





(1)
            actual
                or anticipated variations in our results of operations;(2)
            our
                ability or inability to generate new revenues;(3)
            the
                number of shares in our public float;(4)
            increased
                competition; and(5)
            conditions
                and trends in the mining, gold, silver or precious metals
                industries.





Furthermore,
      because our Common Stock is traded on the NASD OTCBB, our stock price may be
      impacted by factors that are unrelated or disproportionate to our operating
      performance. These market fluctuations, as well as general economic, political
      and market conditions, such as recessions, interest rates or international
      currency fluctuations may adversely affect the market price of our common stock.
      Additionally, at present, we have a limited number of shares in our public
      float, and as a result, there could be extreme fluctuations in the price of
      our
      common stock. Further, due to the limited volume of our shares which trade
      and
      our limited public float, we believe that our stock prices (bid, asked and
      closing prices) are entirely arbitrary, are not related to the actual value
      of
      the Company, and do not reflect the actual value of our common stock (and in
      fact reflect a value that is much higher than the actual value of our Common
      Stock). Shareholders and potential investors in our Common Stock should exercise
      caution before making an investment in the Company, and should not rely on
      the
      publicly quoted or traded stock prices in determining our Common Stock value,
      but should instead determine value of our Common Stock based on the information
      contained in the Company's public reports, industry information, and those
      business valuation methods commonly used to value private
      companies.


-32-


**Investors
      May Face Significant Restrictions On The Resale Of Our Common Stock Due To
      Federal Regulations Of Penny Stocks.**





Our
      Common Stock will be subject to the requirements of Rule 15(g)9, promulgated
      under the Securities Exchange Act as long as the price of our Common Stock
      is
      below $4.00 per share. Under such rule, broker-dealers who recommend low-priced
      securities to persons other than established customers and accredited investors
      must satisfy special sales practice requirements, including a requirement that
      they make an individualized written suitability determination for the purchaser
      and receive the purchaser's consent prior to the transaction. The Securities
      Enforcement Remedies and Penny Stock Reform Act of 1990, also requires
      additional disclosure in connection with any trades involving a stock defined
      as
      a penny stock. Generally, the Commission defines a penny stock as any equity
      security not traded on an exchange or quoted on NASDAQ that has a market price
      of less than $4.00 per share. The required penny stock disclosures include
      the
      delivery, prior to any transaction, of a disclosure schedule explaining the
      penny stock market and the risks associated with it. Such requirements could
      severely limit the market liquidity of the securities and the ability of
      purchasers to sell their securities in the secondary market.








[Remainder
      of Page Left Intentionally Blank.]























-33-


**ITEM
      7. FINANCIAL STATEMENTS**


PART
      I.
      FINANCIAL INFORMATION





ITEM
      1.
      FINANCIAL STATEMENTS







The
      accompanying audited financial statements have been prepared in accordance
      with
      the instructions to Form 10-QSB and Item 310(b) of Regulation S-B, and,
      therefore, do not include all information and footnotes necessary for a complete
      presentation of financial position, results of operations, cash flows, and
      stockholders' equity in conformity with generally accepted accounting
      principles. In the opinion of management, all adjustments considered necessary
      for a fair presentation of the results of operations and financial position
      have
      been included and all such adjustments are of a normal recurring nature.






As
      used
      in this Annual Report, the terms "we", "us", "our", and “Konigsberg” mean
      Konigsberg Corporation and its subsidiary, unless otherwise indicated. All
      dollar amounts in this Annual Report are in U.S. dollars unless otherwise
      stated.




F-1













**KONIGSBERG
      CORPORATION**


**(An
      Exploration Stage Company)**




**CONSOLIDATED
      FINANCIAL STATEMENTS**




**MARCH
      31, 2007 AND 2006**




**(Stated
      in U.S. Dollars)**






















F-2


**REPORT
      OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM**


**To
        the Board of Directors and Stockholders of**
 **Konigsberg
        Corporation**
 **(An
        Exploration Stage Company)**
 
 
 We
        have
        audited the accompanying consolidated balance sheets of **Konigsberg
        Corporation** (the
“Company”) (an Exploration Stage Company) as at March 31, 2007 and 2006,
        the related consolidated statements of operations, stockholders’ equity
        (deficiency) and cash flows for the
        years then ended and for the period from inception on November 3, 2004 to
        March
        31, 2007. These
        consolidated financial statements are the responsibility of the Company’s
        management. Our responsibility is to express an opinion on these consolidated
        financial statements based on our audits.
 
 We
        conducted our audits in accordance with standards of the Public Company
        Accounting Oversight Board (United States). Those standards require that
        we plan
        and perform an audit to obtain reasonable assurance about whether the financial
        statements are free of material misstatement. An audit includes examining,
        on a
        test basis, evidence supporting the amounts and disclosures in the financial
        statements. An audit also includes assessing the accounting principles used
        and
        significant estimates made by management, as well as evaluating the overall
        financial statement presentation. We believe that our audits provide a
        reasonable basis for our opinion.
 
 In
        our
        opinion, the consolidated financial statements referred to above present
        fairly,
        in all material respects, the financial position of **Konigsberg
        Corporation** (an
        Exploration Stage Company) as at March 31, 2007 and 2006 and the results
        of its
        operations and its cash flows for the years then ended and for the period
        from
        inception on November 3, 2004 to March 31, 2007, in conformity with accounting
        principles generally accepted in the United States of America.
 
 The
        accompanying consolidated financial statements have been prepared assuming
        the
        Company will continue as a going concern. As discussed in Note 1 to the
        consolidated financial statements, the Company has suffered recurring losses
        and
        net cash outflows from operations since inception. These factors raise
        substantial doubt about the Company’s ability to continue as a going concern.
        Management’s plans in regard to these matters are also described in Note 1. The
        consolidated financial statements do not include any adjustments that might
        result from the outcome of this uncertainty.
 
 
 
 **/s/****TELFORD
                  SADOVNICK, P.L.L.C.****CERTIFIED
                  PUBLIC ACCOUNTANTS**
 
 
 Bellingham,
        Washington
 July
        23,
        2007










F-3


**KONIGSBERG
      CORPORATION**


**(An
      Exploration Stage Company)**




**CONSOLIDATED
      BALANCE SHEETS**




**(Stated
      in U.S. Dollars)**




**MARCH
                31,**
            
            **MARCH
                31,****2007**
            
            **2006****ASSET****Current**Cash
            
            **$**
            **17,096**
            
            $
            26,793Prepaid expenses
            
            
            **3,030**
            
            
            245**20,126**
            
            
            27,038**Non-Current**Mineral
                properties
            
            
            **1,060,000**
            
            
            0**$**
            **1,080,126**
            
            $
            27,038**LIABILITIES****Current**Accounts payable and accrued liabilities
            
            **$**
            **29,798**
            
            $
            6,632**STOCKHOLDERS’
                EQUITY****Share
                Capital**Authorized:400,000,000
                common voting shares with a par value of$0.001 per share100,000,000
                preferred shares with a par value of$0.001 per shareIssued
                and outstanding:80,657,168 common shares at March 31, 2007and
                77,600,000 common shares at March 31, 2006
            
            
            **80,657**
            
            
            77,600**Additional
                Paid-In Capital**
            
            
            **1,713,143**
            
            
            26,400**Stock
                Subscriptions Received**
            
            
            **25,000**
            
            
            0**Deficit
                Accumulated During The Exploration Stage**
            
            
            **(768,472**
            **)**
            
            (83,594
            )**1,050,328**
            
            
            20,406**$**
            **1,080,126**
            
            $
            27,038




The
      accompanying notes are an integral part of these consolidated financial
      statements.




F-4




**KONIGSBERG
      CORPORATION**


**(An
      Exploration Stage Company)**




**CONSOLIDATED
      STATEMENTS OF OPERATIONS**




**(Stated
      in U.S. Dollars)**




**PERIOD
                FROM****INCEPTION****NOVEMBER
                3,****2004
                TO****MARCH
                31,**
            
            **MARCH
                31,**
            
            **MARCH
                31,****2007**
            
            **2006**
            
            **2007****Revenue**
            
            $
            -
            
            **$**
            **-**
            
            **$**
            -**Expenses**Consulting
                fees
            
            
            **43,662**
            
            
            **-**
            
            
            **43,662**Mineral
                acquisition costs
            
            
            **28,627**
            
            
            **-**
            
            
            **28,627**Mineral
                exploration costs
            
            
            **375,895**
            
            
            **14,789**
            
            
            **390,684**Loss (gain)
                on foreign exchange
            
            
            **578**
            
            
            **(827**
            **)**
            ****
            **(249**
            **)**Office
                and sundry
            
            
            **58,917**
            
            
            **8,993**
            
            
            **69,800**Professional
                fees
            
            
            **131,699**
            
            
            **49,325**
            
            
            **186,948**Stock
                accretion expense
            
            
            **45,500**
            
            
            **-**
            
            
            **45,500**Write
                down of mineral property interest
            
            
            **-**
            
            
            **-**
            
            
            **3,500****684,878**
            
            
            **72,280**
            
            
            **768,472****Net
                Loss For The Period**
            
            **$**
            **(684,878**
            **)**
            **$**
            **(72,280**
            **)**
            **$**
            **(768,472**
            **)******
            ****
            ****
            ****
            ****
            ****
            
            ****
            ****
            
            ********
            ****
            ****
            ****
            ****
            ****
            
            ****
            ****
            
            ******Basic
                And Diluted Loss Per Share**
            ****
            **$**
            **(0.01**
            **)**
            **$**
            **(0.00**
            **)**
            ****
            
            ********
            ****
            ****
            ****
            ****
            ****
            
            ****
            ****
            
            ********
            ****
            ****
            ****
            ****
            ****
            
            ****
            ****
            
            ******Weighted
                Average Number of CommonShares
                Outstanding**
            ****
            ****
            **78,839,477**
            ****
            ****
            **77,600,000**
            ****
            ****
            
            ****






The
      accompanying notes are an integral part of these consolidated financial
      statements.  F-5


**KONIGSBERG
      CORPORATION**


**(An
      Exploration Stage Company)**




**CONSOLIDATED
      STATEMENTS OF CASH FLOWS**




**(Stated
      in U.S. Dollars)**




**PERIOD
                FROM****INCEPTION****NOVEMBER
                3,****2004
                TO****MARCH
                31,**
            
            **MARCH
                31,**
            
            **MARCH
                31,****2007**
            
            **2006**
            
            **2007****Cash
                provided by (used in)****Operating
                Activities**Net loss for the period
            
            **$**
            **(684,878**
            **)**
            **$**
            **(72,280**
            **)**
            **$**
            **(768,472**
            **)******
            ****
            ****
            ****
            ****
            ****
            ****
            ****
            ****Item
                not involving cash:Stock accretion expense
            
            
            **45,500**
            
            
            **-**
            
            
            **45,500**Changes in non-cash working capital
                items:Write
                down of mineral property interest
            
            
            **-**
            
            
            **-**
            
            
            **3,500**Mineral acquisition costs
            
            
            **28,627**
            
            
            **-**
            
            
            **28,627**Mineral exploration costs
            
            
            **375,895**
            
            
            **14,789**
            
            
            **390,684**Prepaid
                expenses
            
            
            **(2,785**
            **)**
            
            **4,056**
            
            
            **(3,030**
            **)**Accounts
                payable and accrued liabilities
            
            
            **23,166**
            
            
            **4,124**
            
            
            **29,798****(214,475**
            **)**
            
            **(49,311**
            **)**
            ****
            **(273,393**
            **)****Financing
                Activities**Share capital issued for cash
            
            
            **784,300**
            
            
            **6,000**
            
            
            **888,300**Share
                subscriptions received
            
            
            **25,000**
            
            
            **-**
            
            
            **25,000****809,300**
            
            
            **6,000**
            
            
            **913,300****Investing
                Activities**Additions
                to mineral property interest
            
            
            **-**
            ****
            ****
            **-**
            ****
            ****
            **(3,500**
            **)**Acquisition
                of mineral property
            
            
            **(200,000**
            **)**
            ****
            ****
            ****
            ****
            **(200,000**
            **)**Mineral
                acquisition costs
            
            
            **(28,627**
            **)**
            ****
            **-**
            ****
            ****
            **(28,627**
            **)**Mineral
                exploration costs
            
            
            **(375,895**
            **)**
            ****
            **(14,789**
            **)**
            ****
            **(390,684**
            **)****(604,522**
            **)**
            ****
            **(14,789**
            **)**
            ****
            **(622,811**
            **)****(Decrease)
                Increase In Cash**
            
            
            **(9,697**
            **)**
            ****
            **(58,100**
            **)**
            ****
            **17,096****Cash,
                Beginning Of Period**
            
            
            **26,793**
            
            
            **84,893**
            
            
            **-****Cash,
                End Of Period**
            
            $
            **17,096**
            
            **$**
            **26,793**
            
            **$**
            **17,096****Non-cash
                investing and financing activities****Common
                stock issued for property acquisition**
            
            **$**
            **860,000**
            ****
            ****
            **-**
            ****
            ****
            **-****Supplemental
                disclosure of cash flow information****Cash
                paid during the period for:**Interest
            
            **$**
            **-**
            
            **$**
            **-**
            
            **$**
            **-**Income
                taxes
            
            **$**
            **-**
            
            **$**
            **-**
            
            **$**
            **-**




The
      accompanying notes are an integral part of these consolidated financial
      statements.  F-6


**KONIGSBERG
      CORPORATION**


**(An
      Exploration Stage Company)**




**CONSOLIDATED
      STATEMENT OF STOCKHOLDERS’ EQUITY**




**PERIOD
      FROM NOVEMBER 3, 2004 (INCEPTION) TO MARCH 31, 2007**




**(Stated
      in U.S. Dollars)**




**COMMON
              STOCK**
            
            **DEFICIT****ACCUMULATED****ADDITIONAL**
            
            
            **STOCK**
            
            
            **DURING
                THE****PAID-IN**
            
            
            **SUBSCRIPTIONS**
            
            
            **EXPLORATION****SHARES**
            
            
            **AMOUNT**
            
            
            **CAPITAL**
            
            
            **RECEIVED**
            
            
            **STAGE**
            
            
            **TOTAL**Balance,
                November 3, 2004
            
            ****
            
            
            ****
            
            
            ****
            
            
            
            
            
            ****
            
            
            ****(Date
                of inception)
            
            **-**
            
            **$**
            **-**
            
            **$**
            **-**
            
            **$**
            **-**
            
            **$**
            **-**
            
            **$**
            **-**Shares
                issued for cashNovember
                3, 2004 at$0.00025
            
            **40,000,000**
            
            
            **40,000**
            
            
            **(30,000**
            **)**
            
            **-**
            
            
            **-**
            
            
            **10,000**February
                28, 2005 at$0.0025
            
            **35,200,000**
            
            
            **35,200**
            
            
            **52,800**
            
            
            **-**
            
            
            **-**
            
            
            **88,000**Net
                loss for the period
            
            **-**
            
            
            **-**
            
            
            **-**
            
            
            **-**
            
            
            **(11,314**
            **)**
            
            **(11,314**
            **)**Balance,
                March 31, 2005
            
            **75,200,000**
            
            
            **75,200**
            
            
            **22,800**
            
            
            **-**
            
            
            **(11,314**
            **)**
            
            **86,686**Shares
                issued for cash:April
                14, 2005 at$0.0025
            
            **2,400,000**
            
            
            **2,400**
            
            
            **3,600**
            
            
            **-**
            
            
            **-**
            
            
            **6,000**Net
                loss for the year
            
            **-**
            
            
            **-**
            
            
            **-**
            
            
            **-**
            
            
            **(72,280**
            **)**
            
            **(72,280**
            **)**Balance,
                March 31, 2006
            
            **77,600,000**
            
            
            **77,600**
            
            
            **26,400**
            
            
            **-**
            
            
            **(83,594**
            **)**
            
            **20,406******
            
            
            ****
            
            
            ****
            
            
            
            
            
            ****
            
            
            ****Shares
                issued for cash:
            
            ****
            
            
            ****
            
            
            ****
            
            
            
            
            
            ****
            
            
            ****April
                21, 2006at
                $0.60
            
            **100,000**
            
            
            **100**
            
            
            **59,900**
            
            
            **-**
            
            
            **-**
            
            
            **60,000**April
                28, 2006at
                $0.60
            
            **83,334**
            
            
            **83**
            
            
            **49,917**
            
            
            **-**
            
            
            **-**
            
            
            **50,000**August
                1, 2006at
                $0.60
            
            **21,000**
            
            
            **21**
            
            
            **12,579**
            
            
            **-**
            
            
            **-**
            
            
            **12,600**August
                1, 2006at
                $0.60
            
            **10,000**
            
            
            **10**
            
            
            **5,990**
            
            
            **-**
            
            
            **-**
            
            
            **6,000**August
                1, 2006at
                $0.60
            
            **417,000**
            
            
            **417**
            
            
            **249,783**
            
            
            **-**
            
            
            **-**
            
            
            **250,200**February
                6, 2007at
                $0.60
            
            **80,000**
            
            
            **80**
            
            
            **47,920**
            
            
            **-**
            
            
            **-**
            
            
            **48,000**February
                6, 2007at
                $0.60
            
            **345,834**
            
            
            **346**
            
            
            **207,154**
            
            
            **-**
            
            
            **-**
            
            
            **207,500**March
                19, 2007at
                $0.15
            
            **1,000,000**
            
            
            **1,000**
            
            
            **149,000**
            
            
            **-**
            
            
            **-**
            
            
            **150,000**Shares
                issued for property:May
                11, 2006at
                $1.00
            
            **500,000**
            
            
            **500**
            
            
            **499,500**
            
            
            **-**
            
            
            **-**
            
            
            **500,000**September
                12, 2006at
                $0.72
            
            **500,000**
            
            
            **500**
            
            
            **359,500**
            
            
            **-**
            
            
            **-**
            
            
            **360,000**Shares
                subscribed for cash:March
                26, 2007at
                $0.15
            
            
            
            
            **-**
            
            
            **-**
            
            
            **25,000**
            
            
            **-**
            
            
            **25,000**Stock
                accretion expense
            
            
            
            
            
            
            
            **45,500**
            
            
            
            
            
            
            
            
            **45,500**Net
                loss for the period
            
            **-**
            
            
            **-**
            
            
            **-**
            
            
            **-**
            
            
            **(684,878**
            **)**
            
            **(684,878**
            **)**Balance,
                March 31, 2007
            
            **80,657,168**
            
            **$**
            **80,657**
            
            **$**
            **1,713,143**
            
            **$**
            **25,000**
            
            **$**
            **(768,472**
            **)**
            **$**
            **1,050,328**




The
      accompanying notes are an integral part of these consolidated financial
      statements.




F-7




**KONIGSBERG
      CORPORATION**


**(An
      Exploration Stage Company)**




**NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS**




**MARCH
      31, 2007**




**(Stated
      in U.S. Dollars)**






**1.**
            **NATURE
                AND CONTINUANCE OF
                OPERATIONS**




The
      Company was incorporated in the State of Nevada on November 3, 2004. The Company
      is an Exploration Stage Company as defined by Statement of Financial Accounting
      Standard (“SFAS”) No. 7. The Company has acquired a mineral property located in
      the Nanaimo Mining Division, British Columbia, Canada, and has not yet
      determined whether this property contains reserves that are economically
      recoverable. The recoverability of property expenditures will be dependent
      upon
      the discovery of economically recoverable reserves, confirmation of the
      Company’s interest in the underlying property, the ability of the Company to
      obtain necessary financing to satisfy the expenditure requirements under the
      property agreement and upon future profitable productions or proceeds for the
      sale thereof.




These
      consolidated financial statements have been prepared on a going concern basis.
      The Company has incurred losses since inception resulting in an accumulated
      deficit of $768,472 since inception and further losses are anticipated in the
      development of its business raising substantial doubt about the Company’s
      ability to continue as a going concern. Its ability to continue as a going
      concern is dependant upon the ability of the Company to generate profitable
      operations in the future and/or to obtain the necessary financing to meet its
      obligations and repay its liabilities arising from normal business operations
      when they come due. Management has plans to seek additional capital through
      a
      private placement and public offering of its common stock. The consolidated
      financial statements do not include any adjustments relating to the
      recoverability and classification of recorded assets, or the amounts of and
      classification of liabilities that might be necessary in the event the Company
      cannot continue in existence.






**2.**
            **SUMMARY
                OF SIGNIFICANT ACCOUNTING
                POLICIES**




The
      consolidated financial statements of the Company have been prepared in
      accordance with generally accepted accounting principles in the United States
      of
      America. Because a precise determination of many assets and liabilities is
      dependent upon future events, the preparation of consolidated financial
      statements for a period necessarily involves the use of estimates which have
      been made using careful judgment. Actual results may vary from these
      estimates.




The
      consolidated financial statements have, in management’s opinion, been properly
      prepared within reasonable limits of materiality and within the framework of
      the
      significant accounting policies summarized below:






a)
            Consolidation




These
      consolidated financial statements include the accounts of the Company and its
      wholly owned British Columbia subsidiary, Konigsberg Explorations Inc. All
      significant intercompany transactions have been eliminated.






b)
            Exploration
                Stage Enterprise




The
      Company’s financial statements are prepared using the accrual method of
      accounting and according to the provisions of Statement of Financial Accounting
      Standards No. 7 (“SFAS 7”), “Accounting and Reporting for Development Stage
      Enterprises,” as it devotes substantially all of its efforts to acquiring and
      exploring mineral properties. Until such properties are acquired and developed,
      the Company will continue to prepare its consolidated financial statements
      and
      related disclosures in accordance with entities in the exploration
      stage.






c)
            Basis
                of Presentation




These
      financial statements and related notes are presented in accordance with
      accounting principles generally accepted in the United States, and are expressed
      in US dollars.




F-8




**KONIGSBERG
      CORPORATION**


**(An
      Exploration Stage Company)**




**NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS**




**MARCH
      31, 2007**




**(Stated
      in U.S. Dollars)**






**2.**  **SUMMARY
      OF SIGNIFICANT ACCOUNTING POLICIES (continued)**






d)
            Use
                of Estimates and Assumptions




The
      preparation of financial statements in conformity with United States generally
      accepted accounting principles requires management to make estimates and
      assumptions that affect the reported amounts of the assets and liabilities
      and
      disclosure of contingent assets and liabilities at the date of the financial
      statements and the reported amounts of revenues and expenses during the
      reporting period. Actual results could differ from those estimates.






e)
            Mineral
                Property Acquisition Payments and Exploration
                Costs




The
      Company capitalizes acquisition and option costs of mineral property rights
      where the Company believes the properties contain potentially mineralized
      material. The amount capitalized represents fair value at the time the mineral
      rights were acquired. The accumulated costs of acquisition for properties that
      are developed to the stage of commercial production will be amortized using
      the
      unit-of-production method.




Management
      periodically reviews the carrying value of its investment in mineral leases
      and
      claims with internal and external mining related professionals. A decision
      to
      abandon, reduce or expand a specific project is based upon many factors
      including general and specific assessments of mineral deposits, anticipated
      future mineral prices, anticipated future costs of exploring, developing and
      operating a production mine, the expiration term and ongoing expense of
      maintaining mineral properties and the general likelihood that the Company
      will
      continue exploration on such project. The Company does not set a pre-determined
      holding period for properties with unproven deposits, however, properties which
      have not demonstrated suitable metal concentrations at the conclusion of each
      phase of an exploration program are re-evaluated to determine if future
      exploration is warranted, whether there has been any impairment in value and
      that their carrying values are appropriate.




The
      Company had not determined whether the mineral claim contains mineralized
      material and has consequently written off all mineral rights acquisition costs
      to operation.




If
      an
      area of interest is abandoned or it is determined that its carrying value cannot
      be supported by future productions or sale, the related costs are charged
      against operations in the year of abandonment or determination of value. The
      amounts recorded as mineral leases and claims represent costs to date and do
      not
      necessarily reflect present or future values.




Mineral
      exploration costs are expensed as incurred.




The
      Company’s exploration activities and proposed mine development are subject to
      various laws and regulations governing the protection of the environment. These
      laws are continually changing, generally becoming more restrictive. The Company
      has made, and expects to make in the future, expenditures to comply with such
      laws and regulations.




Asset
      Impairment




Long-lived
      assets are tested for recoverability whenever events or changes in circumstances
      indicate the carrying amount may not be recoverable, pursuant to guidance
      established in Statement of Financial Accounting Standards No. 144 (“SFAS 144”),
“Accounting for the Impairment or Disposal of Long-lived Assets”. The Company
      determines impairment by comparing the undiscounted future cash flows estimated
      to be generated by its assets to their respective carrying amounts. If
      impairment is deemed to exist, the assets will be written down to fair
      value.


F-9




**KONIGSBERG
      CORPORATION**


**(An
      Exploration Stage Company)**




**NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS**




**MARCH
      31, 2007**




**(Stated
      in U.S. Dollars)**






**2.**  **SUMMARY
      OF SIGNIFICANT ACCOUNTING POLICIES (continued)**






f)
            Basic
                and Diluted Net Income (Loss) Per
                Share




The
      Company computes net income (loss) per share in accordance with FASB Statement
      of Financial Accounting Standards (“SFAS”) No. 128, “Earnings per Share”. SFAS
      No. 128 requires presentation of both basic and diluted earnings per share
      (EPS)
      on the face of the income statement. Basic EPS is computed by dividing net
      income (loss) available to common shareholders (numerator) by the weighted
      average number of shares outstanding (denominator) during the period. Diluted
      EPS gives effect to all dilutive potential common shares outstanding during
      the
      period using the treasury stock method and convertible preferred stock using
      the
      if converted method. In computing Diluted EPS, the average stock price for
      the
      period is used in determining the number of shares assumed to be purchased
      from
      the exercise of stock options or warrants. Diluted EPS excludes all dilutive
      potential shares if their effect is anti dilutive.






g)
            Comprehensive
                Income




SFAS
      No.
      130, “Reporting Comprehensive Income,” establishes standards for the reporting
      and display of comprehensive loss and its components in the financial
      statements. As at March 31, 2007 and 2006, the Company has no items that
      represent a comprehensive loss and, therefore, has not included a schedule
      of
      comprehensive loss in the financial statements.






h)
            Financial
                Instruments




The
      carrying value of cash and accounts payable and accrued liabilities approximate
      their fair value because of the short maturity of these instruments. The
      Company’s operations are in Canada and virtually all of its assets and
      liabilities are giving rise to significant exposure to market risks from changes
      in foreign currency rates. The Company’s financial risk is the risk to the
      Company’s operations that arise from fluctuations in foreign exchange rates and
      the degree of volatility of these rates. Currently, the Company does not use
      derivative instruments to reduce its exposure to foreign currency
      risk.






i)
            Income
                Taxes




The
      Company uses the asset and liability method of accounting for income taxes
      in
      accordance with SFAS No. 109 - “Accounting for Income Taxes”. This standard
      requires the use of an asset and liability approach for financial accounting
      and
      reporting on income taxes. If it is more likely than not that some portion
      of
      all of a deferred tax asset will not be realized, a valuation allowance is
      recognized.






j)
            Foreign
                Currency Translation




The
      Company’s functional and reporting currency is the United States dollar.
      Transactions in Canadian dollars are translated into US dollars as
      follows:




i.
            Monetary
                items at the rate prevailing at the balance sheet
                date;




ii.
            Non-monetary
                items at the rate historical exchange
                rate;




iii.
            Revenue
                and expense at the average rate in effect during the applicable accounting
                period.






Gains
      and
      losses on translation are recorded in the Statement of Operations.




F-10




**KONIGSBERG
      CORPORATION**


**(An
      Exploration Stage Company)**




**NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS**




**MARCH
      31, 2007**




**(Stated
      in U.S. Dollars)**






**2.**
            **SUMMARY
                OF SIGNIFICANT ACCOUNTING POLICIES
                (continued)**






k)
            Environmental
                Costs




Environmental
      expenditures that relate to current operations are charged to operations or
      capitalized as appropriate. Expenditures that relate to an existing condition
      caused by past operations, and which do not contribute to current or future
      revenue generation, are charged to operations. Liabilities are recorded when
      environmental assessments and/or remedial efforts are probable, and the cost
      can
      be reasonably estimated. Generally, the timing of these accruals coincides
      with
      the earliest of completion of a feasibility study or the Company’s commitments
      to plan of action based on the then known facts.




l)  Asset
      Retirement Obligations




The
      Company has adopted Statement of Financial Accounting Standards No. 143 (“SFAS
      143”), “Accounting for Asset Retirement Obligations”, which requires that asset
      retirement obligations (“ARO”) associated with the retirement of a tangible
      long-lived asset, including natural gas and oil properties, be recognized as
      liabilities in the period in which it is incurred and becomes determinable,
      with
      an offsetting increase in the carrying amount of the associated assets. The
      cost
      of tangible long-lived assets, including the initially recognized ARO, is
      depleted, such that the cost of the ARO is recognized over the useful life
      of
      the assets. The ARO is recorded at fair value, and accretion expense is
      recognized over time as the discounted are accreted to the expected settlement
      value. The fair value of the ARO is measured using expected future cash flow,
      discounted at the Company’s credit-adjusted risk-free interest
      rate.






**3.**
            **RECENT
                ACCOUNTING PRONOUNCEMENTS**




In
      February 2007, the Financial Accounting Standards Board (FASB) issued SFAS
      No.
      159, “ *The
      Fair Value Option for Financial Assets and Financial Liabilities - Including
      an
      Amendment of FASB Statement No. 115* ”.
      This
      Statement permits entities to choose to measure many financial instruments
      and
      certain other items at fair value. Most of the provisions of SFAS No. 159 apply
      only to entities that elect the fair value option. However, the amendment to
      SFAS No. 115 “ *Accounting
      for Certain Investments in Debt and Equity Securities* ”
applies
      to all entities with available-for-sale and trading securities. SFAS No. 159
      is
      effective as of the beginning of an entity’s first fiscal year that begins after
      November 15, 2007. Early adoption is permitted as of the beginning of a fiscal
      year that begins on or before November 15, 2007, provided the entity also elects
      to apply the provision of SFAS No. 157, “ *Fair
      Value Measurements”.* The
      adoption of this Statement is not expected to have a material effect on the
      Company's financial statements.




In
      September 2006, the SEC issued Staff Accounting Bulletin (“SAB”) No. 108,
“ *Considering
      the Effects of Prior Year Misstatements when Quantifying Misstatements in
      Current Year Financial Statements* .”
SAB
      No. 108 addresses how the effects of prior year uncorrected misstatements should
      be considered when quantifying misstatements in current year financial
      statements. SAB No. 108 requires companies to quantify misstatements using
      a
      balance sheet and income statement approach and to evaluate whether either
      approach results in quantifying an error that is material in light of relevant
      quantitative and qualitative factors. SAB No. 108 is effective for fiscal years
      ending after November 15, 2006. The adoption of SAB No. 108 is not expected
      to
      have a material effect on the Company's future reported financial position
      or
      results of operations.







F-11




**KONIGSBERG
      CORPORATION**


**(An
      Exploration Stage Company)**




**NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS**




**MARCH
      31, 2007**




**(Stated
      in U.S. Dollars)**






**3.**
            **RECENT
                ACCOUNTING PRONOUNCEMENTS
                (continued)**




In
      September 2006, the FASB issued SFAS No. 158, “ *Employers’
      Accounting for Defined Benefit Pension and Other Postretirement Plans - an
      amendment of FASB Statements No. 87, 88, 106, and 132(R)* ”.
      This
      Statement requires employers to recognize the overfunded or underfunded status
      of a defined benefit postretirement plan (other than a multiemployer plan)
      as an
      asset or liability in its statement of financial position and to recognize
      changes in that funded status in the year in which the changes occur through
      comprehensive income of a business entity or changes in unrestricted net assets
      of a not-for-profit organization. This Statement also requires an employer
      to
      measure the funded status of a plan as of the date of its year-end statement
      of
      financial position, with limited exceptions. The provisions of SFAS No. 158
      are
      effective for employers with publicly traded equity securities as of the end
      of
      the fiscal year ending after December 15, 2006. The adoption of this Statement
      is not expected to have a material effect on the Company's future reported
      financial position or results of operations.




In
      September 2006, the FASB issued SFAS No. 157, “ *Fair
      Value Measurements* ”.
      The
      objective of SFAS No. 157 is to increase consistency and comparability in fair
      value measurements and to expand disclosures about fair value measurements.
      SFAS
      No. 157 defines fair value, establishes a framework for measuring fair value
      in
      generally accepted accounting principles, and expands disclosures about fair
      value measurements. SFAS No. 157 applies under other accounting pronouncements
      that require or permit fair value measurements and does not require any new
      fair
      value measurements. The provisions of SFAS No. 157 are effective for fair value
      measurements made in fiscal years beginning after November 15, 2007. The
      adoption of this statement is not expected to have a material effect on the
      Company's future reported financial position or results of
      operations.




In
      June
      2006, the Financial Accounting Standards Board (FASB) issued FASB Integration
      No. 48, “Accounting for Uncertainty in Income Taxes, an interpretation of FASB
      Statements No. 109” (FIN 48). FIN 48 clarifies the accounting for uncertainty in
      income taxes by prescribing a two-step method of first evaluating whether a
      tax
      position has met a more likely than not recognition threshold and second,
      measuring that tax position to determine the amount of benefit to be recognized
      in the financial statements. FIN 48 provides guidance on the presentation of
      such positions within a classified statement of financial position as well
      as on
      derecognition, interest and penalties, accounting in interim periods,
      disclosure, and transition. FIN 48 is effective for fiscal years beginning
      after
      December 15, 2006. The adoption of this standard is not expected to have a
      material effect on the Company’s results of operations or financial
      position.




In
      March
      2006, the FASB issued SFAS No. 156, " *Accounting
      for Servicing of Financial Assets, an amendment of FASB Statement No. 140,
      Accounting for Transfers and Servicing of Financial Assets and Extinguishments
      of Liabilities* ".
      This
      Statement requires all separately recognized servicing assets and servicing
      liabilities be initially measured at fair value, if practicable, and permits
      for
      subsequent measurement using either fair value measurement with changes in
      fair
      value reflected in earnings or the amortization and impairment requirements
      of
      Statement No. 140. The subsequent measurement of separately recognized servicing
      assets and servicing liabilities at fair value eliminates the necessity for
      entities that manage the risks inherent in servicing assets and servicing
      liabilities with derivatives to qualify for hedge accounting treatment and
      eliminates the characterization of declines in fair value as impairments or
      direct write-downs. SFAS No. 156 is effective for an entity's first fiscal
      year
      beginning after September 15, 2006. The adoption of this Statement is not
      expected to have a material effect on the Company's future reported financial
      position or results of operations.


F-12




**KONIGSBERG
      CORPORATION**


**(An
      Exploration Stage Company)**




**NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS**




**MARCH
      31, 2007**




**(Stated
      in U.S. Dollars)**






**3.**
            **RECENT
                ACCOUNTING PRONOUNCEMENTS
                (continued)**




In
      February 2006, the FASB issued SFAS No. 155, " *Accounting
      for Certain Hybrid Financial Instruments-an amendment of FASB Statements No.
      133
      and 140* ",
      to
      simplify and make more consistent the accounting for certain financial
      instruments. SFAS No. 155 amends SFAS No. 133, " *Accounting
      for Derivative Instruments and Hedging Activities* ",
      to
      permit fair value re-measurement for any hybrid financial instrument with an
      embedded derivative that otherwise would require bifurcation, provided that
      the
      whole instrument is accounted for on a fair value basis. SFAS No. 155 amends
      SFAS No. 140, " *Accounting
      for the Impairment or Disposal of Long-Lived Assets* ",
      to
      allow a qualifying special-purpose entity to hold a derivative financial
      instrument that pertains to a beneficial interest other than another derivative
      financial instrument. SFAS No. 155 applies to all financial instruments acquired
      or issued after the beginning of an entity's first fiscal year that begins
      after
      September 15, 2006, with earlier application allowed. The adoption of this
      Statement is not expected to have a material effect on the Company's future
      reported financial position or results of operations.




**4.**
            **MINERAL
                PROPERTIES**




a)
            Nanaimo
                Properties




Pursuant
      to mineral property agreement dated November 3, 2004, the Company purchased
      a
      100% undivided right, title and interest in four mineral claims in an area
      known
      as the Nanaimo Lakes claims in the Nanaimo Mining Division for cash payment
      of
      US$3,500 (paid November 4, 2004).




On
      November 29, 2005, two of the Company’s four mineral claims in the Nanaimo Lakes
      Mining District were forfeited. On November 18, 2006 and December 10, 2006,
      the
      Company’s two remaining claims in the Nanaimo Lakes Mining District were
      forfeited. The Company no longer holds title to these claims as of the
      forfeiture date.




b)
            Yoquivo
                Properties




On
      May
      31, 2006, the Company entered into an option agreement with Sydney Resource
      Corporation (“Sydney”), whereby the Company was granted an option to acquire up
      to 75% undivided right, title and interest in and to a series of six mineral
      concessions located in the State of Sonora, Mexico, and collectively referred
      to
      as the “Yoquivo Property”. Pursuant to the agreement the Company exercised the
      option by adhering to the terms of the option agreement to acquire an undivided
      50% right, title and interest in the “Yoquivo Property” by investing an amount
      of $200,000 in cash and $500,000 in common shares. The Company has the following
      commitments in the terms and conditions of the option agreement:




i)
            Issuing
                an additional 500,000 shares of the Company’s common stock to Sydney
                within 12 months upon signing the letter of intent dated April 10,
                2006,
                which were issued in September
                2006;




ii)
            Completing
                the following cumulative exploration expenditures totaling $1,850,000
                over
                24 months as defined below:




1.
            Incurring
                $250,000 in cumulative exploration expenditures on the Property within
                6
                months of the date of the option
                agreement;




2.
            Incurring
                $600,000 in cumulative exploration expenditures on the Yoquivo Property
                within 12 months of the date of the option
                agreement;




3.
            Incurring
                $1,000,000 in cumulative exploration expenditures on the Yoquivo
                Property
                within 24 months of the date of the option
                agreement.




F-13




**KONIGSBERG
      CORPORATION**


**(An
      Exploration Stage Company)**




**NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS**




**MARCH
      31, 2007**




**(Stated
      in U.S. Dollars)**




**4.**
            **MINERAL
                PROPERTIES (continued)**




The
      exploration expenditure referred to in ii.1 is a binding commitment whereas
      all
      the other terms are required to keep the option agreement in good
      standing.




Upon
      the
      Company successfully exercising the first option by completing the terms and
      commitments of the agreement, the Company will then be granted a second option
      (“the second option”) to acquire an additional 25% interest in the Yoquivo
      Property by completing the following:




i)
            Within
                60 days of having vested the initial 50% interest, making a cash
                payment
                in favour of Sydney of $250,000;




ii)
            Within
                60 days of having vested the initial 50% interest, issuing a total
                of
                1,000,000 shares of the Company’s common stock to
                Sydney;




iii)
            Within
                24 months of having vested the initial 50% interest, incurring an
                additional $1,500,000 in exploration expenditures on the Yoquivo
                Property.




Should
      the Company successfully exercise the second option to acquire the additional
      25% in the Yoquivo Property, Sydney shall have a one-time right, exercisable
      within 90 days of the Company having vested at 75%, to back into a 50% interest
      in the Yoquivo Property by making a single cash payment to the Company. The
      cash
      payment will be equal to the greater of:




i)
            Two
                times the Company’s cumulative exploration expenditures incurred under the
                terms of the second option, exclusive of acquisition payments;
                and




ii)
            Should
                the value of the Company’s shares issued under the terms of the second
                options exceed $1,500,000 on the date of exercise of the back in
                right, a
                total of two times the Company’s cumulative exploration expenditures
                incurred under the terms of the second option, exclusive of acquisition
                payments, plus one-half of the amount by which the value attributable
                to
                the Company’s shares exceed
                $1,500,000.






The
      Company shall have the additional right, exercisable within 7 days of receipt
      of
      notice of Sydney’s decision to exercise its back in right, to extinguish said
      right through the issuance of an additional 1,000,000 shares of its common
      stock
      in Sydney’s favour.




On
      September 18, 2006 Sydney Resource Corporation merged with Band-Ore Resources.
      The merged company is known as West Timmins Mining Inc. The terms of and
      conditions of the letter of intent dated April 10, 2006 and the option agreement
      dated May 31, 2006 remain in effect.




**5.**
            **SHARE
                CAPITAL**




On
      April
      21, 2006, the Company received $60,000 for 100,000 common shares at $0.60 per
      share.




On
      April
      25, 2006, the Company consummated a 4:1 forward stock split. This increased
      the
      shares outstanding at that date from 19,400,000 to 77,600,000. In conjunction
      with this split, the number of authorized shares was amended to allow the
      issuance of 400,000,000 shares as opposed to the 100,000,000 originally
      authorized. All share amounts have been adjusted retroactively to reflect this
      forward stock split.




On
      April
      28, 2006, the Company received $50,000 for 83,334 common shares at $0.60 per
      share




On
        May
        11, 2006, the Company issued 500,000 common shares at $1.00 as mandated by
        the
        option agreement with the optioner for deemed value of
        $500,000.




F-14




**KONIGSBERG
      CORPORATION**


**(An
      Exploration Stage Company)**




**NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS**




**MARCH
      31, 2007**




**(Stated
      in U.S. Dollars)**






**5.**  **SHARE
      CAPITAL (continued)**




On
      August
      1, 2006, the Company received $12,600 for 21,000 common shares at $0.60 per
      share.




On
      August
      1, 2006, the Company received $6,000 for 10,000 common shares at $0.60 per
      share.




On
      August
      1, 2006, the Company received $250,200 for 417,000 common shares at $0.60 per
      share.




On
      September 12, 2006, the Company issued 500,000 common shares at $0.72 as
      mandated by the option agreement with the optioner for deemed value of
      $360,000.




On
      February 6, 2007, the Company received $48,000 for 80,000 common shares at
      $0.60
      per share.




On
      February 6, 2007, the Company received $207,500 for 345,834 common shares at
      $0.60 per share.




On
      March
      19, 2007, the Company received $150,000 for 1,000,000 common shares at $0.15
      per
      share.




On
      March
      26, 2007, the Company received $25,000 for 166,666 common shares at $0.15 per
      share.




**6.**
            **WARRANTS**





The
      following is a summary of the warrant activity during the years ended March
      31,
      2007 and 2006:





2007
            
            2006Number
            
            Average
            
            Number
            
            AverageOf
            
            Exercise
            
            Of
            
            ExerciseWarrants
            
            Price
            
            Warrants
            
            PriceOutstanding,
                beginning of year
            -
            $
            -
            
            -
            $
            -Granted
            1,000,000
            
            0.20
            
            -
            
            -Exercised
            -
            
            -
            
            -
            
            -Expired
            -
            
            -
            
            -
            
            -Outstanding,
                end of year
            1,000,000
            $
            0.20
            
            -
            $
            -








Compensation
      costs attributable to the issuance of share purchase warrants to employees,
      directors or consultants, is measured at fair value at the date of issuance
      of
      the warrant and expensed with a corresponding increase to additional paid up
      capital at the time of issuance of the warrants. Upon exercise of the warrant,
      consideration paid by the warrant holder is recorded as an increase to share
      capital and additional paid-in capital.


F-15




**KONIGSBERG
      CORPORATION**


**(An
      Exploration Stage Company)**




**NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS**




**MARCH
      31, 2007**




**(Stated
      in U.S. Dollars)**




**6.**  **WARRANTS
      (continued)**




During
      the year, the Company issued an aggregate of 1,000,000 warrants as a result
      of
      the private placements completed. The total fair value of the 1,000,000 warrants
      issued based on the Black-Scholes option pricing model was $45,500. Since the
      warrants vested immediately the Company recognized $45,500 as stock accretion
      expense in respect of these issuances.





The
      weighted average assumptions used in calculating the fair value of warrants
      issued during the year ended March 31, 2007 using the Black-Scholes option
      pricing model are as follows:





2007Risk-free
                interest rate
            4.34%Expected
                life of the warrant
            2
                yearsExpected
                volatility
            45.88%Expected
                dividend yield
            -




**7.**
            **RELATED
                PARTIES**




During
      the year ended March 31, 2007, the Company paid $40,578 (2006: $0) for
      consulting fees to a director of the Company. Amounts paid to related parties
      are based on exchange amounts agreed upon by those related parties.






**8.**
            **COMMITMENTS
                AND CONTRACTUAL
                OBLIGATIONS**




The
      Company is committed to minimum monthly lease payments of $1,050 on its occupied
      premises until August 31, 2007. Rental of occupied premises is exclusive of
      realty taxes and other occupancy cost.






**9.**
            **INCOME
                TAXES**




The
      provision for income taxes differs from the result which would be obtained
      by
      applying the statutory income tax rate of 34% (2006: 34%) to income before
      income taxes. The difference results from the following items:




2007
            
            2006Computed
                expected (benefit of) income taxes
            
            $
            (232,859
            )
            $
            (24,575
            )Increase
                in valuation allowance
            
            
            232,859
            
            
            24,575Income
                tax provision
            
            $
            -
            
            $
            -




As
      of
      March 31, 2007 and 2006, the Company had net operating loss carry forwards
      of
      approximately $314,950 and $65,305 respectively, which expire through to
      2027.


F-16


**KONIGSBERG
      CORPORATION**


**(An
      Exploration Stage Company)**




**NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS**




**MARCH
      31, 2007**




**(Stated
      in U.S. Dollars)**




**9.
      INCOME TAXES (continued)**






Significant
      components of the Company’s future income tax assets are as
      follows:




2007
            
            2006Operating
                loss carry forward
            
            $
            314,950
            
            $
            65,305Mineral
                property expense
            
            
            3,500
            
            
            3,500Exploration
                expenses
            
            
            450,022
            
            
            14,789$
            768,472
            
            $
            83,594Statutory
                tax rate
            
            
            34
            %
            
            34
            %




The
      Company has incurred operating losses and approximately $314,950 which, if
      unutilized, will expire through to 2027. Subject to certain restrictions, the
      Company has mineral property and exploration expenditures of $453,522 available
      to reduce future taxable income. Future tax benefits, which may arise as a
      result of these losses, have not been recognized in these financial statements,
      and have been offset by a valuation allowance. The following table lists the
      fiscal year in which the loss was incurred and the expiration date of the
      operating loss carry forwards:




INCOME
                TAX OPERATING
              LOSS
                CARRYFORWARDAMOUNT
            
            EXPIRATION
              DATE2005
            
            $
            7,814
            
            
            20252006
            
            
            57,491
            
            
            20262007
            
            
            249,645
            
            
            2027Total
                income tax operating loss carry forward
            
            $
            314,950




**10.**
              **SUBSEQUENT
                  EVENTS**
   a.
              On
                  May 16, 2007 the Company effectively amended the name of the company
                  to
                  GoldMountain Exploration Corporation to better reflect its
                  direction.
  b.
              On
                  May 22, 2007, the Company received $15,000 for 100,000 common shares.
  On
        June
        7, 2007, the Company received $8,000 for 53,333 common shares.
  On
        June
        8, 2007, the Company received $7,500 for 50,000 common shares.
  Each
        of
        the above common share issues were issued with one (1) Class A Warrant with
        an
        exercise price of $0.20 per share. They expire two (2) years from the date
        of
        issue of the common shares as indicated above.


F-17





**ITEM
      8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
      DISCLOSURE**





None.





**ITEM
      8A. CONTROLS AND PROCEDURES.**





(a)
      Evaluation of disclosure controls and procedures. Our Chief Executive Officer
      and Principal Financial Officer, after evaluating the effectiveness of our
      "disclosure controls and procedures" (as defined in the Securities Exchange
      Act
      of 1934 Rules 13a-15(e) and 15d-15(e)) as of the end of the period covered
      by
      this Annual Report on Form 10-KSB (the "Evaluation Date"), has concluded that
      as
      of the Evaluation Date, our disclosure controls and procedures are effective
      to
      provide reasonable assurance that information we are required to disclose in
      reports that we file or submit under the Exchange Act is recorded, processed,
      summarized and reported within the time periods specified in the Securities
      and
      Exchange Commission rules and forms, and that such information is accumulated
      and communicated to our management, including our Chief Executive Officer and
      Principal Financial Officer, as appropriate, to allow timely decisions regarding
      required disclosure.





(b)
      Changes in internal control over financial reporting. There were no changes
      in
      our internal control over financial reporting during the last fiscal year and/or
      up to and including the date of this filing that we believe materially affected,
      or are reasonably likely to materially affect, our internal control over
      financial reporting.





**ITEM
      8B. OTHER INFORMATION.**





None.








-34-





**PART
      III**





**ITEM
      9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS; COMPLIANCE
      WITH
      SECTION 16(A) OF THE EXCHANGE ACT.**





OFFICERS
      AND DIRECTORS:





Our
      executive officer and director, and his age and positions are as
      follows:





**Name**
            **Age**
            **Position**Adam
                R. Cegielski
            31
            Chief
                Executive Officer, President,Principal
                Financial Officer, Treasurer,Secretary
                and Director





**ADAM
      R. CEGIELSKI BSC**





Since
      March 27, 2006, Mr. Cegielski has served as our sole officer and Director.
      Since
      March 2001, Mr. Cegielski has been self employed as the owner/operator of
      Insight Consulting, which is a company owned by Mr. Cegielski which previously
      provided management consulting services to IBI Corporation, a company
      specializing in mining ("IBI"), and now solely provides consulting services
      to
      the Company. Mr. Cegielski served as Vice President of IBI from April 1, 2005
      until June 12, 2006. Mr. Cegielski is a graduate of the University of Guelph
      in
      Ontario, Canada where he acquired his Bachelor of Science, Honours degree from
      the College of Physical and Engineering Science in Applied
      Biochemistry.





It
      is
      planned that Mr. Cegielski will continue to provide consulting services through
      Insight Consulting to other public companies, however he currently only provides
      services to us and one other company.





Term
      of Office





Our
      Directors are elected annually and hold office until our next annual meeting
      of
      the shareholders and until their successors are elected and qualified. Our
      officers are appointed by our board of directors and hold office until they
      are
      removed by the board or they resign.





Section
      16 (A) Beneficial Ownership Reporting Compliance





Section
      16(a) of the Securities Exchange Act of 1934, as amended, requires our
      directors, executive officers and persons who own more than 10% of a class
      of
      our equity securities which are registered under the Exchange Act to file with
      the Securities and Exchange Commission initial reports of ownership and reports
      of changes of ownership of such registered securities. Such executive officers,
      directors and greater than 10% beneficial owners
      are required by Commission regulation to furnish us with copies of all Section
      16(a) forms filed by such reporting persons.





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To
      our
      knowledge, based solely on a review of the copies of such reports furnished
      to
      us and on representations that no other reports were required, we are of the
      opinion that Susan Downing failed to make a Form 3, Schedule 13d, Form 4 and
      amended Schedule 13d filing during the fiscal year ended March 31, 2006. Based
      on stockholder filings with the SEC, Adam R. Cegielski is subject to Section
      16(a) filing requirements, and Mr. Cegielski has made all required Section
      16(a)
      filings with the SEC as of the date of this report.





**ITEM
      10. EXECUTIVE COMPENSATION** .








**Executive
                Compensation:**Other(1)AnnualName
                & Principal
            
            Year
                ended
            
            
            
            Compen-
            
            
            TotalPosition
            
            March
                31
            
            Salary
                ($)
            
            sation
            
            Bonus($)
            Compensation**Adam
                R. Cegielski**
            
            
            2007
            
            
            40,578
            
            
            --
            
            
            --
            $40,578CEO,
                President,
            
            
            2006(2)
            
            
            -
                0
                -
            
            
            --
            
            
            --
            -
                0
                -Principal
                Accounting Officer,Treasurer
                and Secretary**Susan
                Downing**
            
            
            2006(2)
            
            
            -
                0
                -
            
            
            --
            
            
            --
            -
                0
                -CEO,
                President,
            
            
            2005
            
            
            -
                0
                -
            
            
            --
            
            
            --
            -
                0
                -Principal
                Accounting Officer,Treasurer
                and Secretary







*
      Does not include perquisites and other personal benefits in amounts less than
      10% of the total annual salary and other compensation. Other than the
      individuals listed above, we have no other executive employees who have received
      more than $100,000 in compensation, including bonuses and options, during each
      of the last three (3) fiscal years.





(1)
      No
      Executive Officer received any LTIP payouts, Options/SARs, restricted stock
      awards or bonuses during the years ended 2005, 2006 and 2007, and no salaries
      are being accrued.





(2)
      Mr.
      Cegielski was appointed as the Company's Chief Executive Officer, President,
      Principal Accounting Officer, Treasurer and Secretary on March 27, 2006, when
      the  Company's
      former Chief Executive Officer, President, Principal Accounting Officer,
      Treasurer and Secretary, Susan Downing, resigned.





-36-








**COMPENSATION
      DISCUSSION AND ANALYSIS**





**Director
      Compensation**





No
      member
      of our Board of Directors has ever received any separate compensation other
      than
      the salary, if any, that they receive as an executive of the Company; however,
      the Board of Directors reserves the right in the future to award the members
      of
      the Board of Directors cash or stock based consideration for their services
      to
      the Company, which awards, if granted shall be in the sole determination of
      the
      Board of Directors.





**Executive
      Compensation Philosophy**





Our
      Board
      of Directors, consisting solely of Mr. Adam Cegielski, determines the
      compensation given to our executive officers in his sole determination. Our
      executive compensation program currently consists solely of salary paid to
      Mr.
      Cegielski. In addition, although we have not to date, our Board of Directors
      also reserves the right to shares of common stock issued in consideration for
      services rendered and/or to award incentive bonuses which are linked to our
      performance, as well as to the individual executive officer’s performance. This
      package may also include long-term, stock based compensation to certain
      executives which is intended to align the performance of our executives with
      our
      long-term business strategies. While our Board of Directors has not granted
      any
      performance base stock options to date, the Board of Directors reserves the
      right to grant such options in the future, if the Board in its sole
      determination believes such grants would be in the best interests of the
      Company.





**Incentive
      Bonus**





The
      Board
      of Directors may grant incentive bonuses to our executive officers in its sole
      discretion, if the Board of Directors believes such bonuses are in the Company’s
      best interest, after analyzing our current business objectives and growth,
      if
      any, and the amount of revenue we are able to generate each month, which revenue
      is a direct result of the actions and ability of such executives.





As
      of the
      date of this filing, no executive officers or Directors hold any outstanding
      options to purchase shares of common stock in the Company, nor were there any
      outstanding options to purchase shares in the common stock of the Company as
      of
      March 31, 2007 or March 31, 2006.





**Long-term,
      Stock Based Compensation**





In
      order
      to attract, retain and motivate executive talent necessary to support the
      Company’s long-term business strategy we may award certain executives with
      long-term, stock-based
      compensation in the future, in the sole discretion of our Board of Directors,
      which we do not currently have any immediate plans to
      award.





-37-







**Criteria
      for Compensation Levels**




The
      Company has always sought to attract and retain qualified executives and
      employees able to positively contribute to the success of the Company for the
      benefit of its various stakeholders, the most important of which is its
      shareholders, but also including its customers, its employees, and the
      communities in which the Company operates.




The
      Board
      of Directors (in establishing compensation levels for the Company’s Chief
      Executive Officer) and the Company (in establishing compensation levels for
      other executives, if any) considers many factors, including, but not limited
      to,
      the individual’s abilities and performance that results in: the advancement of
      corporate goals of the Company, execution of the Company’s business strategies,
      contributions to positive financial results, and contributions to the
      development of the management team and other employees. An officer must
      demonstrate his or her ability to deliver results in his or her areas of
      responsibility, which can include, among other things: business development,
      efficient management of operations and systems, implementation of appropriate
      changes and improvements to operations and systems, personnel management,
      financial management, and strategic decision making. In determining compensation
      levels, the Board of Directors also considers the experience level of each
      particular individual.




Compensation
      levels for executive officers are generally reviewed upon the expiration of
      such
      executive’s employment agreements (if any), or annually, but may be reviewed
      more often as deemed appropriate.




**Compensation
      Philosophy and Strategy**




In
      addition to the “Criteria for Compensation Levels” set forth above, the Company
      has a “Compensation Philosophy” for all employees of the Company (set forth
      below), and a “Compensation Strategy for Key Management Personnel” (set forth
      below), a substantial portion of which also applies to all employees of the
      Company.




**Compensation
      Philosophy**




The
      Company’s compensation philosophy is as follows:




•
            The
                Company believes that compensation is an integral component of its
                overall
                business and human resource strategies. The Company’s compensation plans
                will strive to promote the hiring and retention of personnel necessary
                to
                execute the Company’s business strategies and achieve its business
                objectives.


•
              The
                  Company’s compensation plans will be strategy-focused, competitive, and
                  recognize and reward individual and group contributions and results.
                  The
                  Company’s compensation plans will strive to promote an alignment of the
                  interests of employees with the interests of the shareholders by
                  having a
                  portion of compensation based on financial results and actions
                  that will
                  generate future shareholder value.





-38-





•
            In
                order to reward financial performance over time, the Company’s
                compensation programs generally will consist of base compensation,
                and may
                also consist of short-term variable incentives and long-term variable
                incentives, as appropriate.




•
            The
                Company’s compensation plans will be administered consistently and fairly
                to promote equal opportunities for the Company’s employees.




**Compensation
      Strategy for Key Management Personnel**




The
      Company’s compensation strategy for its key management personnel is as follows:




•
            
            Total
                compensation may include base salary and short-term and long-term
                variable
                incentives based on annual performance, and long-term variable incentives,
                in each case, where appropriate.




•
            
            Compensation
                will be comparable to general and industry-specific compensation
                practices
                as practicable.




•
            
            Generally,
                base compensation, and targeted short and long-term variable compensation,
                if any, will be established within the range of compensation of similarly
                situated companies. The Company’s organization size and complexity will be
                taken into account, and therefore similarly situated companies includes
                companies of similar size and complexity whether or not such companies
                are
                in the Company’s industry or not.




•
            
            When
                determining compensation for officers and managers, the Company takes
                into
                account the employee’s knowledge and experience, including industry
                specific knowledge and experience, to the extent such knowledge and
                experience contributes to the Company’s ability to achieve its business
                objectives.




•
            
            The
                Company reserves the right to adjust annual base salaries of employees
                if
                individual performance is at or above pre-established performance
                expectations.










**ITEM
      11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED
      STOCKHOLDER MATTERS.**




The
        following table sets forth information as of June 12, 2007, with respect
        to the
        beneficial ownership of the Common Stock by (i) each director, nominee director
        and officer of the Company, (ii) all directors and officers as a group and
        (iii)
        each person known by the Company to own beneficially 5% or more of the Common
        Stock:





-39-







**Name
                and Address of**
              **Beneficial
                Owner**
            **Shares**
            **Percent(1)**Adam
                R. Cegielski
              90
                Reynolds St., Oakville,
              Ontario,
                Canada, L6J 3K2
            40,000,000
            49.4%**All
                of the officers and directors as a group (1
                person)**
            **40,000,000**
            **49.4%**





(1)
      Using 81,027,167 shares of our common stock outstanding as of June 12,
      2007, which includes 1,166,666 shares of common stock which were sold in March
      2007 and 203,333 shares of common stock which were sold in June 2007, which
      shares have not been physically issued to date.





Changes
      in Control





The
      Company does not anticipate any changes in control of the Company.





**ITEM
      12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS**





On
      March
      27, 2006, our then Chief Executive Officer and Sole Director, Susan Downing,
      entered into a Stock Purchase Agreement (the "Purchase Agreement") with Adam
      Cegielski, who up until that time had not been affiliated with us. Pursuant
      to
      the Purchase Agreement, Mr. Cegielski purchased forty million (40,000,000)
      shares of our common stock from Ms. Downing for aggregate consideration of
      $30,000. The Purchase Agreement closed on March 27, 2006 (the
      "Closing").





As
      a
      result of the Closing, Mr. Cegielski obtained majority voting control over
      the
      Company, as the 40,000,000 shares which he purchased constituted 51.5% of the
      Company's outstanding shares of common stock based on 77,600,000 shares of
      common stock outstanding as of March 27, 2006 (the "Change in
      Control").





In
      connection with the Change of Control of the Company, the Company's then Chief
      Executive Officer, President, Principal Accounting Officer, Treasurer and
      Secretary, Susan Downing, resigned on March 27, 2006, and Mr. Cegielski was
      appointed as the Company's Chief Executive Officer, President, Principal
      Accounting Officer, Treasurer and Secretary.


Additionally,
        on March 27, 2006, Ms. Downing resigned as the Company's sole Director and
        Mr.
        Cegielski was appointed as the Company's sole Director to fill the vacancy
        left
        by her resignation.


-40-


**ITEM
      13. EXHIBITS**





a)
      The
      exhibits listed below are filed as part of this annual report.





**Exhibit
                No.**
            **Description
                of Exhibit**3.1(1)
            Articles
                of Incorporation3.1
                (2)
            Certificate
                of Amendment to Articles of Incorporation3.2(1)
            Bylaws,
                as amended3.3(3)
            Certificate
                of Change Pursuant to NRS 78.2093.2(3)
            Certificate
                of Correction to the Company's Articles of
                Incorporation10.1(4)
            Stock
                Purchase Agreement between Susan Downing and Adam
                Cegielski10.2(5)
            Option
                Agreement with Sydney (which later merged with another entity and
                is now
                known as West Timmins Mining Inc.).10.3(6)
            Letter
                of Extension from West Timmons Mining, Inc.
              (January
                29, 2007)10.4(7)
            Letter
                of Extension from West Timmons Mining, Inc.
              (May
                31, 2007)21.1*
            Subsidiaries
                of the Company31*
            Chief
                Executive Officer and Chief Financial Officer Certification pursuant
                to
                Section 302 of the Sarbanes-Oxley Act of 200232*
            Chief
                Executive Officer and Chief Financial Officer Certification pursuant
                to
                Section 906 of the Sarbanes-Oxley Act of
                2002





*
      Filed
      herewith.





(1)
      Filed
      as exhibits to our Form SB-2 Registration Statement filed with the Commission
      on
      August 15, 2005, and incorporated herein by reference.




(2)
        Filed
        as an exhibit to our Report on Form 8-K filed with the Commission on May
        29,
        2007, and incorporated herein by reference.
 
 (3)
        Filed
        as exhibits to our Report on Form 8-K filed with the Commission on April
        25,
        2006, and incorporated herein by reference.
 
 (4)
        Filed
        as an exhibit to our Report on Form 8-K filed with the Commission on March
        29,
        2006, and incorporated herein by reference.
 
 (5)
        Filed
        as an exhibit to our Report on Form 8-K filed with the Commission on June
        13,
        2006, and incorporated herein by reference.
 
 (6)
        Filed
        as an exhibit to our Report on Form 10-QSB, filed with the Commission on
        February 20, 2007, and incorporated herein by reference.


(7)
      Filed as an exhibit to our Report on Form 10-KSB,
      filed with the Commission on July 16, 2007, and incorporated herein by
      reference.


-41-


**b)
      REPORTS ON FORM 8-K**





We
      filed
      no reports on Form 8-K during the period covered by this report.





We
      filed
      a report on Form 8-K on May 29, 2007, to report our filing of a Certificate
      of
      Amendment to our Articles of Incorporation with the Secretary of State of Nevada
      to affect a name change to GoldMountain Exploration Corporation.





**ITEM
      14. PRINCIPAL ACCOUNTANT FEES AND SERVICES.**





**Audit
      Fees**





The
      aggregate fees billed for the fiscal years ended March 31, 2007 and 2006, for
      professional services rendered by the Company's principal accountant, Telford
      Sadovnick, PLLC, for the audit and review of the Company's annual and quarterly
      financial statements and for services that are normally provided by the
      accountant in connection with statutory and regulatory filings or engagements
      was approximately $21,500 and $10,000, respectively.





**Audit
      Related Fees**





None.





**Tax
      Fees**





None.





**All
      Other Fees**





None.





-42-




**SIGNATURES**





In
      accordance with Section 13 or 15(d) of the Exchange Act, the registrant caused
      this report to be signed on its behalf by the undersigned, thereunto duly
      authorized.





**GOLDMOUNTAIN
      EXPLORATION CORPORATION**





By:
      /s/ Adam R. Cegielski


Name:
      Adam R. Cegielski


Title:
      Chief Executive Officer and


Principal
      Financial Officer





Date:
      July 23, 2007





In
      accordance with the Exchange Act, this report has been signed below by the
      following persons on behalf of the registrant and in the capacities and on
      the
      dates indicated.




**SIGNATURE**
              **TITLE**
              **DATE**/s/
                  Adam R. Cegielski
              Chief
                  Executive Officer
              July
                  23, 2007Adam
                  R. Cegielski
              President,Principal
                  FinancialOfficer,
                  Secretary,Treasurer,
                  and Director








-43-